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Payday Loans: Is Avoiding Late Fees that Difficult?

By Alan Starc
Posted: 7th August 2013 10:00
means of financing.  In the United States, most of the people avail the aid of short term financing in a bid to pay off important utility bills, rent etc.  However the pay back process is quite expensive, and involves high chances of borrowers being caught in a debt trap.  Most of the time it has been seen that borrowers are either grappling with interests or late fees.  According to a recent report released by the Pew Charitable Trust, it has been found that an average loan of $350 might cost a borrower an exorbitant $520 along with rate of interest. 
Now, this is hard to beat.  With the traditional means of financing not being able to meet the needs of a regular borrower, with their strict credit checking norms etc, short term financing is being sought as the only recourse to tide over immediate cash needs.  Its high rate of interest being one of the major concerns, it can be easily claimed that they are difficult to deal with but not impossible.  Here are a few ways:
Understand Your Responsibility:One of the major criticisms leveled against payday loans is that they have given rise to irresponsible borrowing.  As they are available easily without the involvement of due credit checks, borrowers are usually found becoming dependent on it.  Steer clear of such addiction.  Judge you properly need one before securing a loan.  If you think that you can fulfill the purpose (for which you are considering the aid of short term financing) after your next pay day, you should discard the idea of obtaining the loan.  Do try and understand that you have to pay back the loan on time (i.e, your next pay day).  A rollover would mean that you are supposed to pay way more than you have actually borrowed.  Is it really possible to pay the loan back with added rate of interest and penalty fees, when you couldn’t repay it for the first time? Ask yourself questions like this before applying.  The availability of cheap loans has been made easier so that they can provide financial aid to borrowers when they are in real urgent situations.  But please don’t make the mistake of conducting half baked research solely because you need the cash on an urgent basis. 
Seek the Help of Debt Consolidation Programs:Please be prudent enough to consult affordable debt consolidation programs in your area if you think that the number of loans you are handling at present has gone out of control.  In return of a small fee, a good debt consolidation program will help you bring your loans under one scheme and arrange for a repayment plan at a lower rate of interest.
Follow the Basics:Aside from the points mentioned above, make sure that you are maintaining due decorum as should be followed by a borrower.  As your payday approaches, you might think that you won’t be able to repay the debt on time.  In that case do inform your lender about the delay in advance and explain to him the reason behind the same.
Alan Starc has been a financial writer since 2005 and can be contacted via email at and Twitter at @alanstarc9

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