Upsides And Downsides Of A Payday Loan

By Hugh Grapling

If you go around the Internet to look for quick cash, you'll soon find numerous payday loan companies. Right now, there are over 10,000 payday loan businesses in the US alone. If there's not one near you, you don't have to look hard to find one online.

Every payday loan company or site will give you a neat list of the advantages of a payday loan. On top of the list you will find that a payday loan is quick. If you've tried the regular loan process before, you know that getting a loan can take weeks and requires you to fill out all sorts of forms. The payday loan application process takes less than 20 minutes. No complicated forms to fill out and you have the money in your bank account within a day. That's quick and easy.

Most people use it to cover a temporary shortage in their monthly budget. If you use it in that way, it's not a bad solution. As long as you know you'll be able to pay it all back in time.

The payday loan companies are not in business to give you financial support in tough times. Like all other businesses, they need to make a profit. They do this by charging interest. In the case of payday loans, pretty high interest.

Recently, government bureaucrats have tried to win votes by uttering their disapproval of the payday loan business. They profile payday loan companies as evil predators, preying on the poor consumer. This is of course not the whole picture. But admittedly, payday loan interest rates can reach some pretty steep levels. The interest rates really kick in when you're forced to renew or extend your payday loan because you can't pay it off in time.

If you pay off your payday loan in time, it's a good way to get some quick cash to get you out of a tight spot. If you don't pay it off in time, the interest rate can go up very high, very fast. So be careful and think before you complete your payday loan application.