Three Steps to Prevent the Financial Pain of Payday Loans

The nation’s bad economy – with its high unemployment rate – is turning payday loans into a more important tool for a growing number of consumers. For many people, these small loans are a way to pay the bills until their regular paycheck arrives. Unfortunately, the world of payday loans is marked by excessive fees, exorbitant interest rates and horribly punitive late fees. There’s a reason why a growing number of state legislatures are crafting laws designed to reign in the fees and interest rates that payday lending firms charge their customers. But there is a way to use payday loans responsibly, a way to take on these short-term loans without spending an excessive amount in fees and penalties. You just have to follow three simple rules:
Emergency Use Only

Only use payday loans for real emergencies. If your phone bill is already late and your next paycheck doesn’t arrive for two weeks, a payday loan might be the right choice. If your car’s gas tank is on empty and you need to fill it to get to work each morning, a payday loan, again, might be the appropriate choice. But don’t turn to payday loans to fund a three-day trip to Las Vegas or that new outfit you’re dying to get your hands on. Taking out payday loans for non-essential items is the quickest way to suck the life out of your bank account.
Get It in Writing

One of the biggest dangers with payday loans is the fact that some lenders in this business charge such high interest rates and origination fees. That’s why it’s important for consumers to always ask up front what these fees are. And don’t be satisfied with simply asking: Get these fees in writing. If the payday lender with whom you are considering working won’t put this information on paper, walk away. There’s sure to be another payday lender who will. Remember, your goal is to avoid any nasty surprises. Getting the facts in writing is one way to do this.
Don’t Be Late

Finally, never,ever miss a deadline when it comes to paying back your payday loan. This is the surest way to go broke. Many payday lenders charge excessive penalties when customers are late on their payments. It’s a way for them to boost their profits. You, of course, don’t want to help these lenders do this, so never repay your payday loans late. Payday loans can be a useful tool if you’re facing a financial emergency. Just make sure to follow the three rules, and you’ll limit the financial beating they can cause.

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