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Using Payday Loans to Cover Back Bills

Updated on August 12, 2010

Using Payday Loans to Cover Bills

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Using Payday Loans to Cover Back Bills


Using Payday Loans to Cover Bills
These loans are meant to be short-term tool for use in urgent spots. The loans are intended to repair vehicles, prevent overdraft fees, prevent shutoff of utilities, etc.

While the loans are meant for that, many people would take out the loans to go buying frills, alcohol, etc. this is not ideal, especially because you could find yourself paying loan shark rates for a meal you couldn’t afford in the first place. I have friends that have gone and gotten a payday loan, just so they could go out partying and drinking to forget their bills. That is really dumb.

Many of us receive past due, default, and the other emergency type notices. Once these notices come in the mail, frustration begin to rise. Yet, if you take out a of the amount $200 and agree to repay $240, you are only piling on debt. People with emergencies such as broken transporation, shut off notices, and late fees should consider that other alternatives are . Short-term notes should only be used when there is no other alternative.

Utilitiy Bills Often there are options here, in some jurisdictions help is available, or some have set up programs to help you your utilities. You could also contact your utility and beg for an extension on the amount, or ask to make the bill at a reduced rate to you, so that you can work toward paying the account off. You can also check with utilities , since programs could exist that offer payment plans. The payment plans are great ways that will help you avoid disconnection and the associated fees. Almost always, late fees on power bills and cellphone accounts are often cheaper than payday loan fees.

As for car repairs, do you have a friend or family memberwho knows how to fix cars? If you can find someone that you can trust to , and this individual will not charge you a bunch for repairs, pay them a few . One guy I knew would do mechanic work in exchange for having his laundry done. If doesn't hurt to ask the mechanic if he is willing to trade or barter for the labor. If the piece you need can be bought used, try a local wrecking yard to obtain the part. You can also check and find out if there is public transportation that would work for you until you can afford to repair your vehicle. Some communities offer car pooling services that can put people together that need rides.

Avoiding payday notes can help you save money, avoid stress, and keep your head above water. Many people become addicted to payday notes, since they may become drawn to reloaning and reloaning again, They keep until the weekly interest eats them alive.

Payday loans are just like working with a loanshark, except you will not find yourself with broken kneecaps if you default, but you will likely find your credit destroyed when they get a court judgement to garnish your wages.

You could also figure out how to make extra cash. For example, possibly you have items around the house there are no longer of use to you, which you could sell. Sites such as Ebay,Craigslist or Yahoo Sells can be used to get rid of items that you don't need. Some sites are free, others have fees involved, so check that before you list an item. Otherwise, have a garage sale and put your items up and a reasonable cost, so that the items will sell. This will not only make money, it will also help you to avoid payday loans and their loanshark like interest.

Another option, which is slightly better than payday loans, is pawning items that you want to ultimately keep. The problem here, is often, pawn shops will lowball you on the item's value. One woman I knew took a $5000 ring to a pawn shop where the pawn broker offered to loan her $100 for the ring.

If you have an item you want to pawn, know the value of the item, and don't expect to get a loan for any more than half the value of the item. If you want to keep the item, make sure you make the payments on the loan, and pick the item up by the due date, otherwise the pawn shop will own your item.

You may have no option but to take a payday loan, but try to make sure that you pay the loan off during the term, and do not reloan unless you absolutely have to.

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    • rmhoskinson profile image

      rmhoskinson 

      8 years ago from Midwest USA

      Good points puter_dr. Good options to consider.

    • Tyler Robbins profile image

      Tyler Robbins 

      8 years ago from Midwest USA

      well...I have done this very thing myself!

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