17 People Helped
Member Since: August 2012
People still use AOL?
banditd92's response was:
I hate being in debt. Whenever I make large payments on my credit cards or loans, my dad wonders why. I do it because I hate the feeling of being in debt. When I finish school, I'm going to pay off my student loans ASAP so I can be free.
banditd92's reply was:
Payday loans are good when you need a very small amount of cash quick and know for sure you will be able to pay it off with your next paycheck. The reason the interest is so high is because your loan term is only two weeks. If they charged normal interest rates, they would only be making a few cents to a couple dollars per loan. I took out a $100 loan and my payoff amount was $125. That's not too bad. I was able to pay it off no problem. I'll just have to skip on eating out at restaurants this pay period. These loans by definition are for small short term needs. They are not meant to be long term debt like other loans or credit cards.
When to get a payday loan: When you need a small amount of money compared to how much you make per paycheck, for some unexpected expense. You don't have the credit or desire to take out a longer term loan. Only take these loans if the payoff amount is less than the amount you normally have left over from your paycheck.
When to get a longer term loan: When you need more money than you will be able to pay off with one paycheck. If the amount you need is a large chuck of your paycheck, then you should realize that you won't be able to pay it off in two weeks. In this case take out a medium term loan. One that still offers small amounts but that you can pay in smaller installments over the course of six months to a year. Midterm loans still cater to those with not-so-great credit who live paycheck-to-paycheck just as payday loans do, but they let you pay them off over a longer period of time.
Payday loans have their place, but you have to be vigilant of when to get one. Think about the future. Will you have the money to pay this entire amount off with your next paycheck based on your spending habits? If yes, then a payday loan might be for you. If the amount is small enough, you could end up paying less for the loan than you would for a longer term loan. If you won't be able to pay the full amount with your next paycheck based on your budget, then get a longer term loan so you don't get stuck in a cycle of debt.
The problem with payday loans is the same problem with credit cards. They are easy debt. If you aren't vigilant with your use of them, then you could end up ina mountain of debt before you realize it. All debt is like a drug, easy debt is like a very addictive drug.