This Article is About
payday loan companies
brick and mortar
mortar companies
interest charge
payday loans
layman
two kinds
premise
amount of time
Are Pay Day Loans Safe?
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Are Pay Day Loans Safe?

I get asked this all the time in my line of work, are payday loans safe? They can be if you know what you are doing, but for the layman who is not informed they can be a cancer to your bank account.

More than one kind?

Oh yes, there are basically two kinds of payday loan companies, and both have their traps to watch out for. Before we get into the differences, first ask yourself "Do I really need this loan and can I not find the money elsewhere?" If you are still set on getting one then you need to follow these three rules and you will be OK.

  1. Always take out only what you know you can pay back on the first due date
  2. Take out the loan for the shortest amount of time that works for you.
  3. Make sure the loan is paid off IN FULL on the 1st due date, period!

Now lets take a look into the companies themselves.

The differences in loan companies:

  • Brick and Mortar Companies

These companies follow individual state laws and work on the premise of you post dating a check to your next payday. The amount of the check will include the fees and interest charge for the loan. When the due date comes due the company will present the check to your bank and collect their money. Done and over with.

The traps to avoid with this type of loan is do not ever roll the loan over or not have the check covered at the bank. The company will charge you unbelievable amounts of money to make it right.

  • Online Companies

These companies can do follow their own laws and you must read all the fine print and understand what you are agreeing to before you let them deposit money into your account.

They do not collect the loan plus the fees and interest on the due date like the brick and mortar companies do , they roll the loan over, collect their interest and fees, then add a roll over charge, new fees and interest to the original loan amount. You will owe more after your first payment than you did originally.

You must contact these companies usually 3 business days before the due date to make any payment amount other than the roll over agreement. Call them right after you get the loan and tell them to take the whole amount due out on the first due date. This will eliminate any additional charges.

I hope this helps you choose wisely when picking the right payday loan company. It is always a good idea to check your state's payday loan laws and know what they are before you head to get that loan.

One last note, if you do get in trouble with payday loan debt there are payday loan consolidation companies that can help you with any collection problems. They are priceless in taking care of out of control payday loan debt.

Please feel free to share this article and leave any questions and comments below!


Street Talk

Shakespear said: "Neither a lender nor a borrower be". Very good lens!

Reply
  about 9 years ago

Thanks!

Reply
  about 9 years ago

A very timely and useful warning. Thanks for sharing the advice.

Reply
  about 9 years ago

You bet Theo, many people are short on money this time of year.

Reply
  about 9 years ago

This should be extremely helpful for those who are stuck and have to take out a payday loan. You did a great job outlining the pitfalls, something that these companies try to cover up. It's great you're getting the word out.

Reply
  about 9 years ago

One must be very informed when using these companies!

Reply
  about 9 years ago

Very good advise thank you

Reply
  about 9 years ago

You are welcome Tommy

Reply
  about 9 years ago
Leo E  

Great info, when it comes to payday loans you really need to go into things with your eyes wide open and know what you're getting into or things can out of hand in a heart beat.

Reply
  about 9 years ago

They sure can Leo

Reply
  about 9 years ago
Dom Wells  

Great advice, especially about the time you take the loan out for

Reply
  about 9 years ago

Shorter the better

Reply
  about 9 years ago

You mean there is a safe way to take out a payday loan? Who would have thought that? I noticed that our bank offers this service now online. All you have to do is click... I think I will just say NO! Thanks again for your great work, buddy.

Reply
  about 9 years ago

If a person has to use one, they can do it safely, but I would say no myself too.

Reply
  about 9 years ago

Good information, Shawn. You're certainly right about bypassing these guys all together if at all possible.

Reply
  about 9 years ago

Yes Bill, but so many people do not.

Reply
  about 9 years ago

Good info Shawn. I would do without before I used these guys

Reply
  about 9 years ago

Wise choice, but a person can use them as a one time helper if done right, but of course, at a cost. :)

Reply
  about 9 years ago

thanks for the info Shawn!

Reply
  about 9 years ago

Thanks for stopping by!

Reply
  about 9 years ago
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