The Pros And Cons Of Payday Loans - A Reality Check

Whether you've got a big issue with your car, that is going to cost money unexpectedly, or you don't have that lovely Friday feeling, as you don't have the money to go out, the temptation of applying for a payday loan could be hitting you ....right now as you're reading this article. You can be sure that you're not alone, as the number of people who use payday loans increases every single year. So why shouldn't you join the gang, it's just another form of lending after all, isn't it?

It is true, payday loans are a form of lending, however they are not meant to be used irresponsibly. So going back to that Friday feeling, if it is that you need fast cash to go to the pub or club with your friends, think again. In the cold light of next Monday morning, you may regret this. In fact by taking out a payday loan so casually, you may miss out on other nights out, because of the interest that you will have to pay back on top of the loan itself. It really adds up.

However if you fit into the category of a person who needs their car to get to work, or for example, there is an important household bill to pay, that if left unpaid may get you a bad credit rating, then you may fit the profile of when payday loans can be a sensible option, when used responsibly.

Let's take a look at the pros and cons of payday loans – let's get a reality check:

Pros of payday loans:

1) If accepted you can get your hands on the cash you need within minutes or hours, depending on the lender.
2) You can apply easily online.
3) No-one needs to know your business, except for the payday loan lender.
4) It is kind of like a cash advance on your next salary, the only difference being it doesn't come from your employer.
5) Payday loans can really help you out of a sticky financial spot.
6) Getting a payday loan can be a better option than an overdraft in some circumstances.

It almost seems like a win-win situation, but hold on a moment and read the cons before getting online and applying!

Cons of payday loans:
1) The interest rates can be very high.
2) The industry has a bad reputation.
3) Many people get sucked into the system and roll over their payments, to end up in a very bad financial situation further down the road.
4) The ease of these loans makes them appear casual but they are not, due to the high interest rates.
5) It is easy to get into debt using any type of loan, unless you really are able to discipline yourself.

Having read the pros and cons, you should have had a reality check. In fact in some countries the industry has been vetted more thoroughly, although this doesn't mean you are always choosing the best payday loan lender. There are lots of brokers in the industry who make commission out of your time of need. It is a complex subject, but once you are fully aware and borrow responsibly from a responsible lender, then the system can work. However many people, both customers and lending companies don't fall into the responsible category.

Jackie writes for Cash Café who is a responsible lender, with lower interest rates than many other providers. Additionally their loan terms are more flexible with repayment periods of between 5 and 45 days. If you need a payday loan and are able to borrow responsibly, they are a good option. Click on same day payday loans now!
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