There has been a lot of bad press in the past about quick payday loans and how people ended up in a cycle of increasing costs and inability to repay the loans back. Some people also ended up taking out loans to pay back loans, leading to a never ending process of always being short the necessary funds to cover the cost of the loan.
Protection in Place
In reality these issues with quick payday loans are not because of anything done by the lenders, it was because of lack of understanding or unforeseen events that occurred with the borrowers. However, in some cases unscrupulous lenders did take advantage of people and overcharged in fees leading to what could convert to interest rates that were simply astronomical.
To address these issues each state came up with regulations on quick payday loans. Lenders operating within the state have to follow these guidelines that are put in place for consumer protection. Lenders have to fully disclose all fees and also the APR rate for the loan which makes it easy to compare to other interest rates with traditional loans or credit cards.
What Is Your Emergency?
One of the most important things to consider is what constitutes an emergency to apply for quick payday loans. Borrowing to buy something you want isn’t an emergency but borrowing to buy or pay for something you can’t be without is an emergency. Car repairs, fixing your hot water tank or air conditioner, paying for emergency medical care or needing to help out in a family crisis would all be good options to consider quick payday loans.
Borrow the Smallest Amount
Since you do have to pay back the loan on your next paycheck, you need to keep your borrowing as low as possible. Remember you also have to consider other bills you normally pay out of that check as well. You don’t want to end up missing these bills to pay off the loan, which creates that vicious borrowing cycle.
A reputable lender offering quick payday loans will never pressure you into borrowing more than you are comfortable with. The lender may inform you are approved up to a set limit, but you have the ability to determine the amount that you ask for in the loan.