is a company that provide short term, unsecured loans. That’s not as bad as it sounds. Unsecured loans just means that they will not ask you for collateral. These loans can also be referred to as “cash advances.” In order to qualify for Payday Loans you need to make a steady income and have a checking account. The average Payday Loan amount is around $375. To get your loan you will be charged a small one time fee; and if you need the money again later you only need to pay that same small fee to renew your loan. 

12 million Americans use this company every year! Most people use the money to pay on everyday expenses when they can’t make it until the next pay check. So to get short term finical relief they go through Payday to pay on things such as a car payment, utilities, groceries, or rent. It’s also a good way to make sure you don’t overdraft your bank account.

Even though payday loans can be very helpful for some there are many people who believe that it’s just not worth it. Some claim that taking out loans with payday actually hurt them financially in the long run. Unlike a loan you would get from a bank, when you have to pay back the loan from Payday you are required to pay it all back in full plus interest. Most people can’t afford that so they have to keep renewing the loan which builds their debt even higher. 90% of people who use payday will have to borrow more money within 60 days because they cannot afford to pay off the debt they owe. Some customers stated that Payday has charged them up to 300% interest rate.

Other customers discussed how they felt tricked by the contract they were required to sign. The contract was made to be wordy and confusing to the average person so that they would not understand the obligations. Much of the fine print was hidden and even spaced out over several pages so the customer would not get a clear understanding of what they were really agreeing to. What they in fact were signing was a contract that stated they would have to pay back the money they borrowed plus any interest rate the lender saw fit. When paying the amount back you would first be paying a “principle” fee; or a fee for their services. When you think that you have payed off your debt they call you to ask for more money and if you refuse to pay they will garnish your wadges until they receive the money you owe.

Payday can in fact be helpful for emergency uses, if you know how to budget your money and are able to pay them back on time. However, it can make things very difficult for your finical life if you are not careful. Depending where you live there may not be a Payday in your area but there are other cash loan places you could go to. Make the decision for yourself whether you believe taking out a loan would be worth it or not.