Money problems can make people consider getting payday loans, or borrowing a paycheck advance. Payday loans are small, short-term loans with high interest rates, which makes them a bad idea; here are eight ways to avoid borrowing a paycheck advance.

“When many people get into a financial bind, they go to a payday lending store and borrow a few hundred dollars,” says Ethan Ewing, president of Bills.com. “They plan to repay the loan in a week or two, when they have the money. But they pay a huge price. Payday loans can become a dangerous addiction that can cost hundreds or thousands of dollars a year.”

Below are ways to avoid getting a payday loan. For tips on earning more money, click How to Sell Your Stuff on Amazon.com and eBay 4 CD ’s. And, read on for Ewing’s advice for getting a payday loan and avoiding borrowing a paycheck advance…

Getting a Payday Loan? How to Avoid Borrowing a Paycheck Advance 

The typical interest fee on a payday loan is $15 on a $100 advance, and most loans must be repaid within two weeks.

1. Understand the true cost of payday loans – and consider a credit card loan instead. Getting a payday loan can cost you an annual interest rate of 400 percent. Over three months, a $300 credit card loan at 16 percent interest would cost $15. A payday loan would cost $270. “It’s not a good idea to rack up credit card charges that you cannot pay off entirely each month, but payday loans are far more costly than other forms of credit,” Ewing says.

2. Plan your spending and set your budget goals. To avoid getting payday loan, create a budget that accounts for all income and expenses. Plan funds for every category, and use self-discipline not to spend more. Setting a budget can be challenging, but it’s the best way to avoid borrowing a paycheck advance!

3. Build an emergency fund. Set aside money for emergency use only – some money saving tips are to brown-bag lunch, avoid extras like coffee or CDs, hold a yard sale, or take on a second job. Put your savings in a simple savings account. Don’t keep a lot of cash around the house, but if you have to, make sure you hide your money well.

4. Avoid payday loan rollovers. If you do borrow a paycheck advance, remember that it can quickly get complicated. Many people “roll over” their loans, borrowing the loan again, rather than repaying it. The Federal Trade Commission has pointed out that the cost of three rollovers on a $100 loan could total $60. If you’re borrowing a payday loan, pay it off immediately.

5. Check into overdraft protection. Many banks offer overdraft protection service that, for a small fee, allows a check or debit to clear even without enough funds in the account. It’s not an ideal way to deal with money problems, but the cost is much lower than getting a payday loan.

6. Borrow from a friend or relative. “If you just need a few dollars to tide you over, ask for an IOU instead of borrowing a paycheck advance. However, an unpaid loan can destroy relationships, so don’t use this option unless you know you can pay it back — and borrow only on a rare occasion,” says Ewing. Put the loan agreement in writing – and read Tips for Lending Money to Friends or Family Members.

7. Talk to the creditor. If a medical care costs are the problem, for instance, ask the doctor about making payment arrangements. Most medical providers will work with patients to pay the bill in a way they can afford. Read 5 Tips for Saving Money on Medical Care for more ideas.

8. Get help – such as debt settlement support. If bills typically are more than you can pay, look into all the options. If necessary, check with a reputable debt settlement firm to help find a way to get debt under control.

“If you find yourself in a tight financial spot, don’t make the problem even more stressful with burdensome interest rates and ongoing debt,” Ewing says. “With careful planning, you can avoid the payday lender — and find financial freedom.”

If you have any thoughts or questions about getting a payday loan, please comment below…

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