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Payday Loans

What You Need to Know Now About Payday Loans

Payday loans are short term loans you can use to get through a rough spot. Before you use a payday loan, make sure you understand the costs and risks. This page gives you a quick overview of how they work, and ideas on what you can do to avoid using payday loans.

What are Payday Loans?

Payday loans are small loans you can use when you are temporarily out of money. Most often, payday loans are short term loans (two weeks or so) for a modest amount of money (a few hundred bucks). To get a payday loan, you typically write a check for the amount you are borrowing – plus a fee. You might leave the check with the lender, and they cash it once you are ready to repay.

If you can’t repay your payday loan when it comes due, you can “roll it over” so that the loan is extended.

Alternatives to Payday Loans

Instead of using a payday loan, consider some alternatives:

Build up an emergency fund in your savings account (sometimes easier said than done)

Keep an open credit card for emergency expenses

Get a signature loan (or unsecured loan) from your credit union

Pick up a part time job for extra cash

Set up a payment plan with your lenders

Investigate overdraft protection plans for your checking account