What You Do With The Money

When it comes to the idea of applying for a payday loan

, people have extremely mixed feelings about it. A payday loan is best used when it is taken out in order to pay for a necessity that you cannot afford at the moment. These types of necessities can be a mortgage payment, an emergency room visit, or something else of the sort. The company expects that you will pay off your loan at the time you receive your next paycheck, which is why it is known as a payday loan. Some people love the idea of using this type of loan, and others believe that it is an entirely horrible idea. However, when it comes to this type of loan, what you do with the money can ultimately make you feel differently about it.

In the best possible scenario, you have a financial crisis, but you have poor credit, so you are unable to take out a traditional loan. You decide to apply for a payday loan and are approved. You do not take out more money that you can afford to pay back with your very next paycheck. You take care of your emergency, and on your next payday, you pay your loan off in full. You do not have to pay any additional fees on top of the one that you had to pay in order for the company to hold your check in the first place. You are back on your feet, and everything has worked out fine.

The scenarios that most often play out for people who feel negatively about the payday loan companies is remarkably different. These people typically decide to take out a loan in order to go on a vacation or purchase a frivolous item that they do not have the funds on hand to afford. Instead of taking out a payday loan that they can afford to pay back the next time that they receive a paycheck, they decide to borrow whatever the limit is that the company will allow. This is usually an extremely high amount that is upwards of two-thousand dollars. They purchase the item that they did not need, but on their next payday, they are unable to pay back the loan in full. They end up having to pay additional fees until they finally save up enough money to pay off the loan. However, this is only after they have accrued hundreds of dollars in additional fees and interest on the loan.

by: John Simons

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