A payday loan sounds excellent in theory. It is intended as a short-term loan which you can apply for quickly to receive a small amount of cash fast.
We would love to be able to give you a black-and-white answer here, a simple “yes” or “no,” but the truth is more complicated than that.
Insights on Reputation of Payday Loans
Payday loans have unfortunately garnered a questionable reputation over the years. You may have seen news articles or consumer warnings stating that payday loans are scams.
Payday loans can be safe, so long as you are using them responsibly and applying for them through a legit lender.
But there are unfortunately a lot of scammers who have surfaced to take advantage of vulnerable consumers. These predatory lenders offer payday loan products which are not safe.
Predatory lenders approve customers who cannot afford to pay back their loans. Those consumers end up with compounding interest and fees to pay back. They make them take out additional loans to try and cover old, unpaid loans. They then get trapped in a cycle of debt.
Safe payday lenders do not operate that way. They carefully screen customers before offering them loans. They may accept consumers with bad credit or no credit, but they make sure that they have the income to pay off the loan.
It is essential to be cautious while you are applying for a payday loan. But so long as you do your homework, you can stay safe and get the cash you need. Here are a few quick tips:
Reviewed by: Casey Bond
Date Reviewed: Mar 05, 2019