Payday Loans - Cash Lenders

We have found many sites on the internet that offer payday loans, so we decided to take a closer look on what these are all about. These are emergency loans, that come at a high price.

A variety of companies offer these services - check cashers and finance companies most commonly. They are small, short-term cash loans at very high rates, much higher than those even on credit cards.

These typically work where the borrower will write a personal check payable to the lender for the amount they want plus a fee. The lender then gives the person the amount of the check minus the fee. Fees charged for an online paycheck loan are usually a fee charged per amount borrowed - such as $20 for every $100 borrowed. And then you can extend (roll-over) the loan and pay more fees for each extension.

The cost of a payday loan must be disclosed under the Truth in Lending Act. This includes the financing charge (dollar amount) and the annual percentage rate (cost on a yearly basis).

It is a very expensive way to borrow money by getting a ash advance loan secured by a personal check - such as a paycheck loan.

Alternatives to paycheck Loans

Here are some of the options to consider before choosing a paycheck loan:

1. Consider a small loan from a small loan company, try to get an advance from your employer, or take out a loan from family or friends. Even taking out a cash advance on a high interest rate credit card will be cheaper than a paycheck loan.

2. Ask credit card companies that you owe money to to give you more time to pay your bills. They may be willing to do this for a late charge, an additional finance charge, or a higher interest rate - which will still be lower than that for taking out paycheck loans.

3. Make a budget. Figure out your expenses for the month and avoid buying unnecessary things.

4. Explore overdraft protection on your checking account - this may help prevent further problems.

5. Get help with developing a debt repayment plan by contacting your local consumer credit counseling service. You should be able to find services that will do this at little or no cost.

6. If you absolutely must resort to paycheck loans, make sure you borrow only as much as you need to pay with your next paycheck and still have money to make it to the following paycheck.

Site Maintained by Richard Malis, M.D.
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Last Updated April 18, 2012