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May 6, 2013

Why Use a Payday Loan Service

Why do people use a payday loan service? Is it mainly used for emergency cash needs or is it used to help pay bills? Actually, it's used for both. Payday loans serve a unique underserved population of people, who may not qualify for a traditional loan, yet these people are trying to be responsible and pay their bills on time. Maybe you have overspent, and the bills are starting to come in and you need some financial help. Or maybe you have a true emergency because the dishwasher, water heater, or car broke down at the last minute and you don't have any money in savings (now that's another story, but we won't get into that here). Does anyone ever plan a "medical emergency"? No they don't. Accidents just happen. Here are some thoughts on why payday loan companies may be able to help you if you use them responsibly.

As stated above, most people try to manage their finances so they can pay their bills on time. You might have read some negative publicity on payday loan companies and the high Annual Percentage Rate or APR that is charged. Although the APR is a very misleading rate to use, companies are nevertheless required to list it. By design, a payday loan is supposed to be paid by your next paycheck - not in one year.Therefore using the term Annual percentage rate is misleading. A more accurate way to look at it is the Fee that a company charges per $100 borrowed. This fee should be compared to the fee you are charged by your bank for a bounced check along with the corresponding late bill payment fee for the bill you are trying to pay. And of course a payday loan company is going to charge you a fee for loaning you the money. You don't expect them to work for free, do you? Your job is to compare the fee charged by various companies so that you can get the best deal for you.

If you have bad credit, bruised credit, less-than-perfect credit, or no credit at all, payday loans can help you. As you begin to establish credit, or try to get back on your feet, payday loans can give you the cash you need between paydays so that you can be responsible and pay your own bills on time. Please note, that payday loans are not meant to be used over and over again. To compare online payday loans by fee, take a look at ManagingMoney.com Payday Loans.

If you find that you keep getting yourself in a financial bind, you need to ask yourself how did you get into this trouble in the first place and start making changes. The first place to start is by establishing a monthly budget and sticking to it. We at ManagingMoney.com have a number of Free Budget Worksheets to help you including: Monthly Budget Worksheets, Balanced Monthly Spending Plan, and Debt Payoff Plan. You should also download the Free Personal Budgeting e-Book for additional tools to get you back on financial track so you can be fiscally responsible.


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