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Payday Loans: Do the Cost Justify the Price? 

Payday Loans were introduced in 2001 by two different marketing firms who were trying to seek out new ways of generating profits in an ever increasingly competitive market. Originally payday loans were designed as a convenient way for low-income individuals and families to get short-term cash between paychecks. Applicants would receive a small loan, usually no more than $200.  

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Most people would probably say that Payday Loans are expensive, but on the other hand, they do provide services to thousands of Americans each day. Payday loans are short-term loans mostly used by those who rely on their next paycheck for money. 

Payday Loans are often referred to as Cash Advances because applicants borrow the cash with the intention their debt is paid back with interest on the applicant’s next payday date.  

Upsides to a Payday Loan

Payday loans can be helpful to those who live paycheck to paycheck but find them self with unexpected expenses before the next payday. 

Payday lenders do not perform a traditional credit check before giving out loans since they understand this population has little access to traditional forms of credit and financial assistance. 

Payday loans can range anywhere from $200-$1000 depending on how much an individual makes a year. Payday loans are also very quick. They are approved rather quickly, and funds are deposited into your bank account the same day or by the next business day after approval. 

Downsides to a Payday Loan 

Payday Loans are high interest rate, high-cost loans that work as potential benefits for those who need money quick with little effort; however, Payday Loans come with many disadvantages that cause consumers to think before rushing into such a financial decision. Payday loans begin as small business transactions but the cycle of borrowing, and repayment can become a money trap for many borrowers. Payday loans are convenient but if you can’t pay them off when it is time to do so, then the benefits turn into disadvantages. 

Payday Loans become dangerous when used too frequently which can cause more financial problems than they help. 

Many argue that payday loans are bad because consumers pay more in interest than they receive from the original loan; but there is another side to the debate. Payday Loans certainly benefit many borrowers who would otherwise be turned away by other financial institutions or overlooked by credit card companies.  

Payday loans provide immediate access to much needed cash that could prevent borrower’s from falling into a cycle of missed payments, late charges, increased fees or even default. 

Although many people find themselves living paycheck to paycheck and payday loans can be costly it can be beneficial if the individuals are responsible and only borrow what they need to take care of unexpected expenses or cover other expenses until the next paycheck.   

Whether a payday loan is a positive or negative depends on an individual circumstances.  The cost of a payday loan is relatively low compared to other forms of debt, including overdrafts, or bounced checks. 

Although there is much controversy about Payday Loan companies charging such high interest rates.  Payday Loans continue to aid the consumer who has temporary financial needs. 

If you are considering taking out a payday loan, make sure to carefully consider all the potential costs involved before signing any contracts or agreeing to pay off your loan in any specific timeframe.  Payday loans should be used carefully and only when necessary, in order to avoid facing serious financial difficulties or accumulating massive amounts of debt. 

Once you decide this is a good option for you, Mypaydayloan.com can make the process smooth and help you to complete your application. Be sure that you understand all the cost involved and the repayment terms of the loan agreement.   

Payday loans have upsides and downsides but only the individual consumer needing a payday loan can decide if the cost justifies the price of a payday loan. Payday loans are often for covering emergencies but should never be taken out unless you are 100% confident that you can pay it back when it is due.