A Payday Loan – Use it Wisely
More people and more legislators are realizing that the Payday Loans product is a very useful financial tool. It is designed to resolve short term cash flow problems. A short term credit need is that you have expenses that must be paid immediately but you will not have the cash to meet these needs in your personal bank accounts for 2 weeks to a month. Since the Banking system meltdown of 2008/2009 there is a new environment for using payday loans to finance short term credit needs.
Banks and credit card companies have been reducing limits on credit cards and lines of credit. They have introduced new charges if you go over your credit limit. Even if the interest charged on your debt puts you over the limit they will charge you a fee of as much as $45 on top of the interest charges and any annual fees you pay. Checking account overdrafts incur substantial charges. You can be pushed into an overdrawn situation by preauthorized debits on your checking account. You can be pushed into a situation where you go beyond your overdraft limit and then you get NSF charges. NSF checks incur substantial charges from your bank, plus charges from the payee/vendor and the payee/vendor’s bank. Just about all of these charges start at $40 on top of all of your other banking fees.
The banks attitude is that they will survive. You may not but they will. However, crisis always breeds innovation and the Payday Loans industry is evolving to meet your needs. Legislators all over the world are realizing that their constituents need cash flow help on a month by month basis. So instead of being outraged by the abuses that can develop in the Payday loan industry, legislators are regulating the industry to protect borrowers from the more predatory sellers in the market.
When you apply for a Payday Loan from an ethical vendor the total cost and the total amount to be paid back will be clearly stated. The loans will have a maximum period of 2 weeks or a month depending on the constituency in which you live. There should be no possibility of a rollover. Where the laws have been written to protect borrowers the loan must be paid in full within the 2 week or one month period. Any effort to allow you the borrower to pay only the charges on the loan and then float it for another 2 weeks or a month is unethical and is illegal where laws have been updated. Payday loans are to solve short term problems and not recurring debt issues. If you use them for anything else it is financially self destructive. There are other tools to solve long term budget problems.
If you have a short term budget deficit you need to keep focused working to make money and working to not incur more charges on the spending side of your budget. Once you have identified the problem of how much you need for how long, modern technology allows you to solve your problem quickly. You can apply for Payday Loans on your home computer, your laptop or your hand held device. You will have your answer in seconds and the money in your account at the start of the next business day. You keep working with that stress removed and focus on getting your personal finances back in shape. The charges for a short term loan will be less than all of the bank charges you may incur. You save time and money and that is when a Payday Loan makes sense.
Derek Volcano is a self appointed financial management consultant who writes online for magazines and websites such as http://www.thinkyourmoney.com
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