It is becoming more and more difficult to get fast financial help due to the current economic downslide. Many people are finding themselves having to write checks that they know they cannot cover just to get by. Perhaps even worse, some people are doing without some of life’s basic necessities because their pay date is still a week or two away. There is an alternative to all these situations and while fairly expensive, payday loans are usually a better alternative.
With the economy in turmoil the banks have tightened up on their lending practices. Some people that were able at one time to walk in a bank and get a quick signature loan are no longer able to do so. It isn’t because they have bad credit, it is because the banks simply don’t have the money to lend. Aside from being rejected by the bank, another downside to bank loans is the fact that every time you apply and are approved or declined, you will have a negative mark on your credit report just for applying. It is just the way the system works these days.
Many consumers have even taken it upon themselves to be their own credit grantor by writing checks that they do not have the funds to cover. This is not a new practice by any means but it is becoming more common place as banks tighten up their purse strings. One might think that the banks would frown upon this activity, but in reality the banks make huge sums of money from these people who will end up paying large fees to the bank for the hot check. Even worse, if the consumer is not ale to cover the check in a timely manner they can actually be arrested and jailed for fraud!
On the opposite end of the scale are people who will do without some basic necessities for a while until they get their regular paycheck. These people resort to cutting back on the number of meals they may eat in a day or just don’t eat at all. Many times these people will have their utilities disconnected because they are unable to pay them on a specific date which is quite often just a few days before their payday but they do not know of any alternative but to let the services be interrupted. Once they finally get paid, they end up paying staggering reconnect fees and late fees just to get the basic utilities restored.
It is these situations that payday loans are quite literally the best option. While this type of loan may seem expensive at the outset, compared to the fees and penalties for writing bad checks or having to pay reconnect fees for utilities, payday loans are very competitive. Some people will point out that these loans have an unusually high APR, which is true. But these are short term loans and can not honestly be based on APR. An average payday loan will cost the consumer approximately a total of 25%. Compare this rate with the cost of the options mentioned above and payday loans are clearly the best choice during these trying times. If you were to annualize the bounce check fees or reconnect fees toy would see an APR much higher than what you will pay for a payday loan.
