Online Payday Loan Cautions: Beware of Advance Fee Loans!
Advance fee loans have burned some users of pay day loans quite badly. Beware lest you fall into the same trap as a woman who goes, on the net, by the name of “S.B.” – initials that now stand for “Suckered Badly” after she was persuaded to unbelt more than one thousand dollars in advance of a pay day loan.
Here’s the thing about pay day loans: they’re supposed to be designed for people who have no money until they next get paid. So why a company would ask for a fee up front, before providing the agreed loan sum, is beyond me. Oh – that’s because they wouldn’t. So please, please don’t end up like poor old Suckered Badly – who’s probably quite a nice lady, poor thing. If you apply for a loan and you get asked to pay money before you even get it, inform the authorities and withhold money.
A person could write a whole book of online payday loan cautions. I’ll restrict mine to one or two. First: never, ever take out a pay day loan unless it is your genuine last resort. Exhaust all other avenues before you turn to a loan provider that will be charging you an APR in the multiple hundreds of per cent. Yes, if you pay your loan back in the original four week period, you’ll only stand to pay an extra thirty per cent or so on the original figure: but if you start stretching out your payments over extra months you’re in trouble.
Second: Never borrow any money on a pay day loans basis that you can’t afford to pay back with your next pay check. When I say “afford to pay back with your next pay check” I don’t mean that it is a figure that would technically be covered by the amount of money you get in your next pay packet. I mean that you can pay back the full loan, plus interest, and still have enough money to live on for the whole of the next month, until you get to your third pay check in this sequence.
What we’re talking about, in other words, is not using multiple pay day loans to keep yourself going, because every month your whole pay check is paying off the loan you took out the previous month. That kind of debt cycling is unsustainable – it only takes one extra thing to come along and you’ve broken the chain of your last resort.
As well as my cautionary tales about pay day loans, I’m going to give you a piece of advice – which is to go and get advice from people who are professionally qualified to give it. That doesn’t have to mean a banker, or a financial adviser. It can be as simple as contacting your local citizen’s advice bureau. One thing’s for sure: you should never take a step into short term loans without first being told whether they are your best solution, by someone who has the training and professional background to make that call.
And as noted at the start of this post – if you do get advised that a short term loan is right for you, don’t take one out that asks you to pay in advance!
Online Payday Loan Cautions: Beware of Advance Fee Loans!
