One of the first things you will find when looking at a solution for some short term cash problems, is a payday loan. In the US alone, there are over 10,000 payday loan businesses. If you don’t know anyone near you, it’s not hard to find a payday loan business online.

Every payday loan company or site will give you a neat list of the advantages of a payday loan. On top of the list you will find that a payday loan is quick. If you’ve tried the regular loan process before, you know that getting a loan can take weeks and requires you to fill out all sorts of forms. The payday loan application process takes less than 20 minutes. No complicated forms to fill out and you have the money in your bank account within a day. That’s quick and easy.

A payday loan is usually used to cover a temporary budget shortage. Some unexpected expense has come up and you need to cover it quick. If you use it that way, it’s not a bad solution. What’s important is that you’re sure you’ll be able to pay it off in time.

The payday loan companies are not in business to give you financial support in tough times. Like all other businesses, they need to make a profit. They do this by charging interest. In the case of payday loans, pretty high interest.

Many bureaucrats have uttered their disapproval of the payday loan business. They profile payday loan companies as ‘predators’, and say that they prey on the unsuspecting consumer. The main complaint is that the interest rates of a payday loan can reach very high levels, even higher than credit card debt. The interest rates really kick in when you’re forced to renew or extend your payday loan because you can’t pay it off in time. When you do this, your interest rate usually doubles up. If you do this a few times, it can end up costing you about $ 50 in interest to get a $ 100 payday loan.

A payday loan can be a solution, but only if you’re careful about the deadline. Make sure you pay it back in time, or the high rollover interest rates ramp up very fast and you may find yourself even deeper in the hole.

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