Payday loans also known as posted-dated check loans or deferred deposit loans are short-term high-rate loans that cost consumers like you a lot of money. You can use payday loans when you aren’t quite able to make rent, make a credit card payment or make your car payment; however, you should only use these types of costly loans sparingly and consider many alternatives before you decide to use this type of loan service. Continue reading learn more helpful tips about payday loans and what you need to know before using one of these short-term, advanced loan services.

Populations that Use Payday Loans

  • Underprivileged populations
  • People struggling to make ends meet
  • People who need emergency cash fast
  • People with bad credit
  • People with no credit history

As you can see there are many different types of people, from a variety of financial backgrounds who use payday loans for a variety of reasons. Some people may use payday loans to help them make their monthly car payment, while another person may need money to buy groceries. However, while payday loans may seem like a godsend for people who are struggling to make ends meet, they are actually the opposite.

For instance, let’s say you need at least $100 for groceries. So you end up taking out a payday loan for $100. The payday loan service charges you a fee of $20 for borrowing the $100. So instead of borrowing $100, you are borrowing a total of $120. However, let’s say that you end up short again the next month. So you have to ask for an extension on the loan you borrowed a month ago. You will have to pay an additional $20 fee for the extension. In reality, the $100 you borrowed ends up costing you $140, and that’s only if you pay off the loan before you accrue another service charge.

The only way payday loans can be used safely is if you can pay them back when you get paid again. Otherwise, you are better off finding another alternative.

Payday Loan Alternatives

  • Ask a close friend or relative for a small loan and set up a time that you can pay them back.
  • Check with you financial institution to see if they offer any short-term loan services.
  • Use the overdraft service put into effect by your bank only if it is a less expensive alternative to taking out a payday loan.
  • Speak with everyone you owe money to such as creditors, your landlord, etc and let them know of your current financial situation. They may be able to grant you a one time extension or set up a payment plan

Payday loans may make it easy to get a small sum of cash instantly, but in the long-run you end up paying a lot more, especially if you aren’t able to pay your loan back by the due date. You should consider many alternatives before taking out a payday loan. You may also want to take a money management class or speak with a debt counselor who can help you find ways to cut monthly expenses so you have more money in your pocket at the end of the month.


People are easily fooled by the different names payday loan services use to disguise their high-cost loan services. Payday loans are short-term, high-cost loans that prey on people who have no credit, poor credit, and are struggling to make ends meet. Learn about what other financial alternatives you have to payday loan services, so you can avoid costly fees and accumulating more debt, apply here for payday loan.