The Payday Loan Dilemma

Sometimes it really is tempting to see the sign that says "Get $800 right now!" or another sign that tempts your need for money, only to pass it by. Who wouldn't want an extra $800 for their cash account? I think everyone would agree that they would be happy to have that much. However, the only clincher is that you would have to pay it back by the time your next payday rolls around! But nevertheless, you want more money right now and cannot wait until your next paycheck.

So you decide to get a payday loan. You get your full paycheck amount and spend it for what you need or want, but then you have to pay them back at your next payday. Usually that means you are going to be short on cash again until the following payday. So what happens? You get another payday loan - that's what happens! You then pay that loan back with either your next paycheck or even from another payday loan from another lending institution (i.e. robbing Peter to pay Paul), and this continues until you are in a vicious cycle which you cannot get out of because you will constantly need the money back that you paid to the payday loan institution.

There are actually several ways to get out of this seeming never-ending cycle, and you probably want to hear all of them. The easy answer would be to just win the lottery so that you won't have to worry about any of it, but of course, that would be way to easy, but very difficult to do. But no one ever said that things in life are easy, and this isn't one of them. One of your first options to get out of the payday loan cycle is to do without a little bit of cash flow for 2 to 3 weeks. If you can do that then you will have enough time to get together a couple of paychecks so that you'll not only be able to pay the payday loan back, but you'll have a little bit to spend also. Doing without for a couple weeks will mean that you'll have more later.

Another option would be to borrow a little bit of money from a family or friend, interest free. Many family members will help you out no matter what, however, you can't borrow from them forever. If you do decide to ask for a loan from a family or friend, be sure to pay them back immediately! A loan from a friend that you have not repaid will usually always be a source of tension between you and them until you finally do repay!

One last option would be to join a credit union and to receive help from them. Local credit unions understand what it's like to be broke at times and to need money. Sometimes they are a little more lenient than a regular bank can be, but if you must go to a regular bank, be careful! Interest rates for personal short term loans can be very high sometimes, and if they are, that will defeat the purpose of the loan in the first place.

As soon as you get out of the payday loan cycle, be sure to budget responsibly from now on and do not fall into the trap again! Since that's what payday loans essentially are, a trap, you'll have to be cautious and careful not to go back to them every time that you need money. Proper budgeting and maybe working a few overtime hours or a second job will help assure that you have enough money for rent, food, and clothes on your back. But payday loans usually cost more than you can afford, even if you don't realize it at the moment. If you play safe, save money, and work hard, you'll have more money and win in the long run!