What's a Payday Loan?

An advance payday loan is a great way to receive money for those unexpected expenses in a quick and secure way. And now with the government putting restrictions on interest rates, fees, number of allowed rollovers, maximum advance, and maximum term, you no longer have to worry about high fees and rollovers.

What kinds of people use advance payday loans? Well most borrowers have an average income between twenty five thousand and fifty thousand dollars a year. All of them have bank accounts; the majority has some college education, and almost half of them own their homes. But what they all have in common is that an advance payday loan has helped them with their unexpected financial problems.

Nine out of ten Americans surveyed in a recent poll said that they consider an advance payday loan useful. (National Taxpayers Union) But many states are considering new legislation. In some states, the proposals would effectively kill payday loaning. Critics argue that when mishandled, borrowers can dig themselves into a hole. When virtually anything in life can dig you into a hole though when mishandled.

The critics have missed the important points of payday loans. They ignore the cost of the alternatives. Not being able to pay for unexpected bills, or to fix the car, or for sudden medical expenses, can result in loss of work or income, increased costs, pain, inconvenience and more. Another alternative is to build up large late fees and interest charges by failing to pay on time or bouncing a check.

Ten percent of Americans use payday loans. The next time you encounter an unexpected financial crunch, think of an advance payday loan, you'll be happy you did.