Payday loans are popular as ever and their popularity seems to never come down. However, looking at the interest rate charged on them one should make every attempt to stay away from them and if they are really left with no options but to take them , one must have a concrete repayment plan for the same.

Credit counseling for payday loans is available and a counselor might put an individual on a debt management program or debt consolidation program.

People who avail loans like payday loans end up paying high interest rates. These payday loans are modern-day debt traps. Many people have been trapped in these loans and they are seeking for credit counseling to get out of the debt trap. Availing payday loan is not difficult and an individual just needs a valid photo ID and proof of income, therefore people in need of emergency cash opt for a payday loan. These payday loans are like drugs, one knows that they are bad for the individual yet people keep on taking them due to their easy availability.

Keep away from the dangerous payday loans

There has been a widespread awareness campaign by the media and the government with regards to the payday loans and each of them have tried to bring to the notice of the people that these loans are never good for their financial health and one should keep away from them. However, one can see that these loan with bad credit are always in the limelight for their popularity. What could be the reason that in spite of the wide scale promotions people are still taking these loans? Well, the answer is quiet simple. People really are at loss of options. There are very few options which are available to the customers if they are looking for really short term loans, somewhere between 7-14days or one month. An amount which is too small and can be paid on the next payday that the individuals have.

Getting these loans is really simple and one can’t even imagine if they can get the same facilities, convenience and the timelines on these loans. Most of the time people do not wish to approach the banks for these loans and they just do not want them to reflect into their credit reports. Neither would one like to approach the friends and relatives for citing their needs and taking these short term loans. All one requires is to get the loans separately and close them by the next payday.

Interest rates have always been a cause of concern for the consumers of these loans. The rates are astronomical and if one fails to pay the loans on time they are bound to face the penalties and ever higher interest rates which will cost them dearly. So, a well thought of decision with a prior plan in place for the repayments can see one get the real benefits of the loan.

More about Payday Loans

Payday loans are very popular and this is due to the easy approval of these loans. The amount can vary from USD 100 to USD 1,500 and one gets the loan within 24-48 hours of submitting an application. One pays the loan amount with the next paycheck of the individual therefore it is also known as Cash Advance Loans. The duration of these lasts very less as well, which between 2-3 weeks. An individual with bad credit can also avail this option without any difficulty as there is no credit check required.

The downside of payday loan is that an individual pays heavy interest rates

For instance- When an individual borrows USD 100 the creditor charges the individual with USD 20 as interest and processing charges. Now adding these charges with the Annual Percentage Rate (APR) will give an interest rate of 520 percent whereas if an individual takes a loan from bank 12 percent interest rate will be charged. Also the people are generally not able to pay back on time and they ask for an extension and therefore they end up paying even higher rates. These loans are so profitable that the financial institutes offer programs like no fax payday loans and even do not ask for documents in some cases.

If an individual becomes entrapped in the financial mess he should consider some counseling services and they help them to provide professional assistance in devising a debt management plan. In most of the cases the counselor makes an individual debt-free within 12-24 months.

It is advised that if an individual is seeking for credit counseling then one should go to the Non- profit agencies. One should check:

If an individual is in financial turmoil choose the one connected to the Better Business Bureau (BBB) and it is advisable to look for free credit counseling services.

The debt counseling includes tips on money management, negotiating with the creditors, and financial awareness programs. If the condition is very bad then it is advisable to go for debt consolidation.

The list of approved agencies for credit counseling can be obtained from the government’s department of justice website and also one should keep in mind to hire an agency which will charge the individual after the settlement of debt.

Instant Payday Loans

Instant payday loans are cash advance loans which one can get within 24-48 hours of applying. These are very popular due to its easy availability and the loaning amount varies from $100 to $1,500, depending upon the amount of the paycheck of an individual.

The duration of these loans is about 2-3 weeks which is according to the paycheck of an individual and this prompts financial institutes to give loans.

This is one of the popular financing methods for short term. One just needs to fax the necessary documents to the lending organization. The person with bad credit can also avail this offer easily without any hassle.

These loans have become so easy now-a-days that doesn’t even need to leave the comfort of the house. Just fill the form with the details of the employment, checking account number and a verifiable phone line number. They don’t even check the credit score.

Mainly, people take this type of loan to pay the installments of other debts to maintain their credit card score. But the interest rate of payday loan is very high in comparison to any other secured loans. For example- If an individual borrows $200 he can end up paying $250 within 2-3 weeks time.

The instant payday loans are getting very popular with them as they are hassle free and one could get them within no time. This is one of the best options available when in an emergency but it is advised to keep away from these as much as possible due to the high interest rates.

Consider The Other Alternatives That You May Have Before Availing Payday Loans

Payday loans while being quite popular amongst people looking at the quick inflow of funds to meet any financial crisis. However, there are quite a few people who criticize these too, calling them the worst forms of funding that you could have. However, these payday loans obviously have their own advantages and disadvantages, they are often the last resort for people looking for quick funds to meet any financial emergency. These short-term advances are meant to be repaid within a few weeks time, at most on your next payday. Moreover, they can be pretty expensive too. Therefore, as advised by the experts, these are to be used only during emergencies and that too when you are sure about their repayments.

Hence, there are other options that are available which should be considered before availing the payday loans. Let us take a look at some of these other types of loans that are available to you:

Personal Loans: There are both secured and unsecured personal loan that are offered by the banks that can be availed for a longer repayment period and at lower interest rates. However, you need to have a good credit history and enough time at hand to avail these loans as the banks have their own procedures to be followed before the loan application is approved.

Credit Unions: These can be helpful even if you have a less than perfect credit report and often provide the loans at rates lower than those of the bank loans. However, these have restrictions in terms of membership and you should be eligible to become a member before you can think of availing a loan from these credit unions. However, the benefits they offer are quite a lot and hence it is worthwhile to explore the ones where you could become a member.

Financial Institutions: There are some financial institutions that exist specifically as lending organizations and have more lenient terms than the conventional banks. However, they still have certain parameters w.r.t. to income; expenditure etc. that needs to be met and their interest rates are often higher than those of the banks. However, these loans may still prove to be cheaper than the payday loans.

Loans against insurance policy: if you have a life insurance policy of a good accrued value then you may be able to take a loan against it at reasonable rates.

Salary Advance: If you are an employee in any organization, you could check with the Finance or HR departments regarding the policy on advance against your salary. This can be a good option as most of the time this is interest free money and at times, you can pay even it back in a few installments.

Cash Advance from credit cards: in case of an emergency you can even withdraw cash from your credit card. Though, there are fees and charges attached to it, it can still work out to be cheaper than a payday loan and can be availed without any documentation.

Borrowing from family: Another resort could be to ask your friend or family to help you out. This may be a bit embarrassing for most people, but if the situation demands it and your credit scores are worse than average, this is worth a try to avoid a risky and expensive proposition.

However, in the case, none of these work and you find that payday bad credit loans seem like the only options possible, it is best to try the online vendors. These not only offer competitive rates but also have very fast approval process. This will help you get the money almost instantaneously and that too at competitive rates compared to the market.