Don't Take Out Payday Loans Lightly

It's not uncommon for people to be short of cash towards the end of the month, in the period between running out of spare cash and receiving your next paycheck. There are many ways that people tide themselves over this period, ranging from using a credit card for both purchases and cash withdrawals, or making use of a bank overdraft.

There is another option that you'll see advertised all over the web though: Payday Loans. In essence, these are simply short term loans for small amounts, which you clear when you next get paid. They are usually only taken out for a few days or a week or two.

Given the widespread advertising and publicity given to payday loans, you'd be forgiven for thinking that they were completely without drawbacks, but that's definitely not the case. Firstly, they're expensive. Secondly, they're often used as a last resort, when the other methods of accessing cash such as overdrafts have been used up and are no longer available.

Thirdly, it's usually a simple matter to renew your loan every month, which leads to a constant spiral of debt and interest charges, which is not something to recommend if you're already struggling financially.

This is not to say that payday loans are completely evil and should be avoided at all costs, but it makes sense to explore other ways of accessing ready cash before committing yourself to a loan which might last much longer than you anticipate.