The decision whether a payday loans is right for you

The decision whether a payday loans is right for you - Payday loans are often presented as a quick fix for a bad financial situation so that you get the gap between lack of money and your next payday to close. The basic idea is that you borrow a small amount of a few hundred dollars for a short period of a week or two, and the debts are paid next time you pay.

This type of service can be very useful indeed, if you are more money for a living, or if a bill or unexpected costs that you simply can not confronted if necessary, but payday loan always the best option as it have?

Let us first look at the undeniable benefits of these loans before the disadvantages and possible alternatives Maybe you can use if you have a payday loan is not good for you.

Lending criteria for payday loans are very generous indeed, and almost everyone who has a job and a bank account to authorize really well. This means that even people with terrible credit ratings should be able to get a payday loan even though they are dismissed for just about any other form of financing.

They are also easy to organize, and often you can use the money in your account within days. Some lenders can even organize a night right loan transfer your account the next day, which of course is very useful if you need money in a hurry.

Finally, as a rule, is a very simple question "refresh" on your new credit when you approved for the first loan if you find that you have to make use of the option, when resources are scarce, again in the future.

There are, however, you mentioned to promote two major drawbacks of payday loans that you rarely find in ads and websites. First, they are very expensive compared to other forms of credit. Because the loan term is so short, a tax equal to 20% of the amount you borrow - this is the default - to be working a TAE-eye wateringly high.

The second problem is closely related, because they are very expensive, you can easily fall short of cash next month when you have passed the loan, and paid the fee. In this scenario, it is too easy to update your loan to cover the deficit, resulting in higher costs and an endless cycle of debt.

So if you decide that a payday loan is not a good choice for you, what alternatives do you have? The first uses a credit card if you have one. Although credit cards are usually very expensive form of financing you about the debt over several months, rather than to distribute a tax return immediately.

Many bank accounts are now offering a line of credit, which are also used to the lack of money to cover the short term. The interest rate for an agreed overdraft is probably bigger than a credit card, but the bank can not approve your request. Beware before and coat without the consent of the bank to go, the charges will be collected here are very expensive.

If neither option is available to you, and you have no other way to make money in the form of loans outside the family to have, this could be the best option for a payday loan. Just make sure that you use it correctly, and note the warning on long-term state funding.