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Why Payday Loans Won’t Help You Financially

It’s not uncommon to hit a financial rough patch. In fact, everybody has some point in their life when their finances aren’t what they would like them to be. This may occur for many reasons from illness to losing a job. However, too many people think that getting through their rough patch can be handled with payday loans and other similar methods of obtaining money. This really is not the case although it may seem tempting. Sure, a payday loan here or there could help you out of a tight spot. Especially if you need a little bit of money to pay for a car repair or your house payment. However, you should not be taking out payday loans more than once or twice per year at a maximum. The reason why is because they are expensive.

The Basics

Most payday loans will cost you about $25 per $100 you borrow. That’s to say if you borrow $200 you will be paying $250 back. That’s not too bad when you consider the bounced check fees you might avoid with this. What you must keep in mind, though, is that for payday loans to be worthwhile they can only be used sparingly and with small amounts of cash. For example, most payday loan companies will approve you up to $1500 after you have received and paid a couple smaller loans. This seems like a lot of money and it could really help you out of a bind. The question is, will you have the $1500 plus the fees in two weeks time? The total would be close to $1900 and most people’s paycheck is not that much. That’s why you should never borrow that much money from a payday loan.

Remember, if you are in a bind and need fast money there is nothing faster than a payday loan. Just don’t borrow more than $200 to $300 because when your paycheck rolls around in 2 weeks you want to have enough money to pay the loan back, but also enough money to live on. Be smart and don’t get yourself in a hole that will be impossible to get out of.

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