Payday loans and quick cash shops seem to be popping up everywhere these days. Every new strip mall seems to have one or more of these quick loan stores, and for those in need of quick cash they can be a great resource.
More and more traditional bankers are expanding into the growing business of payday loans, and this increased competition means good news on the part of consumers. As more and more businesses compete for the same customers, the fees and interest rates on such loans often fall. While the interest rates on these loans still tend to be higher than other types of loans, they can be used to save money in the long run by avoiding late charges and interest rate surcharges.
Using a payday loan to keep your credit rating clean can often be a good idea. Making a late payment on a mortgage payment is one of the worst things a consumer can do in terms of credit rating. Late payments on mortgage loans, car loans and other loans are immediately reported to the credit reporting agency. In addition to any late fees or charges, this negative credit information can make it difficult to get additional loans in the future when you need them.
It therefore often makes sense to pay the fees and interest rates associated with payday loans to avoid being late on these important payments. Therefore, paying a fee now to avoid bigger problems in the future can make a lot of sense.
Of course, this type of procedure is dangerous and expensive if used constantly. In an emergency, however, a payday loan can be a great way to protect your valuable credit rating by avoiding a late or missed payment on an important loan.
About the author