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What is a Payday Loan? Payday loans, small loans and deferred presentments are small, short-term cash advances that help you meet your urgent financial needs. For millions of people, these loans are a fast and convenient way to cover unexpected expenses such as car repair and medical bills. A payday loan can even save you money by helping you avoid bounced checks and late fees on bills. When should I use a payday loan?To help you determine whether a payday loan is right for you, we recommend that you consider how you're planning to use it, how urgent your need is, and what your other options are. Payday loans can be expensive, so you should only use them after you've considered the facts and decided that it's your best option. Here are some guidelines that may help you decide if a payday loan is right for you. What do people use payday loans for?Many customers use payday loans to cover unexpected expenses or pay bills. Popular reasons are to get a car fixed, pay for medical care, or to cover a monthly bill. If you're a little short on cash, a payday loan is a great way to save money by avoiding bounced check fees and late payment fees. Use a payday loan to avoid bounced check fees and overdraft chargesA payday loan is frequently a better option than bouncing a check or using your bank's overdraft protection service. Each time you bounce a check, both your bank and the merchant will charge a fee. The total cost is typically $40 to $50 for each bounced check! Using a payday loan for other urgent cash needsLet's face it - sometimes you just can't wait until your next payday. If you have an urgent need, a payday loan may be your best option. For example, if your car breaks down and you might miss work then a quick loan might be a smart option. Also, if you have an urgent medical need but are short on cash, a payday loan may be the right solution. Millions of people use payday loans to cover these expenses because they are fast and convenient. However, we always recommend that you look at all of your options before taking out a payday loan. When should I not use a payday loan?PayDay loans are not right for all situations. They can be expensive, so before getting a payday loan, look into all of your options. Here are some options to consider before getting a payday loan: Call the company that sent you a bill and request an extension or work out a payment plan Cut back on other expenses such as dining out or entertainment Borrow money from your employer, a friend, or family member Check into emergency assistance programs in your community Get an advance from your credit card provider or bank (make sure you understand all of the fees that may apply) Depending on your personal situation, these may be less costly options than a payday loan. However, if these options aren't available then make sure you find the lowest cost payday loan possible. Payday loans are for short-term cash management and not intended for larger financial problems that consumer credit counseling would resolve.
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