Loans 4 States

1.  Shop around - Payday loans are expensive compared to many more traditional lines of credit (but still cheaper than most Overdraft Protection lines from banks).  Still, simply because they are already expensive is no reason to throw even more money out the door.  Many companies offer deals for first time users, up to and including no fees on first loans.  If this is one time need, which hopefully it is, look for those deals especially.

2.  Watch the Fine Print - Though most payday loan companies are actually fairly straightforward about fees, it’s important to know what happens in a late payment, for example.

3.  Pay it off - With fees for extensions and every other possibility under the sun, the payday lenders assure that you will pay through the nose unless you do one thing: pay the loan off in full and on time.  Make a partial payment and extend the rest?  You’ll still get zapped with an extension fee and it’s likely to be an even bigger percentage of the amount you still owe.  If you don’t have the money in your budget to pay the payday loan back at payday, you need to immediately look for other sources of cash. Especially if you are just a little short of paying the whole loan, which will leave you adding late fees or extension fees to your balance, consider family, friends, employers or other sources for a small personal loan.  Have a rummage sale, sell something on consignment or maybe on eBay.  Do any of the things that you could do to raise cash instead of taking the loan in the first place, if you had the time.

4.  Look for less expensive credit or a part time job - These are longer term solutions to help you stay out of the payday loan trap.  The payday loan trap happens when you borrow for a real need then the next payday you find yourself borrowing to pay for groceries or other essentials because your whole paycheck went to pay back the payday loan.

5.  Develop a budget and a financial plan - Something has you looking for a payday loan.  If that was a temporary emergency, then find a way to build an emergency fund.  Payday loans are typically $500 to $1000, maximum, an amount most people should strive to have in savings for emergencies.  If using payday loans is becoming chronic, then look at your budget.  Don’t have a budget?  Make one.  If the problem is unexpected and unavoidable expenses, then consider how to up your income.  If the problem is overspending, look at ways to save.