ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Why You Shouldn't Take Out a Payday Loan

Updated on September 23, 2010

When you've run out of money or been hit with an unexpected bill, payday loans are a tempting proposition. Getting a temporary loan that you can pay back on your next payday (hence the name) sounds like a perfect solution to short term money worries but sadly, too many people jump headfirst into taking out a payday loan without really understanding what they've got themselves into. Here are some of the reasons why payday loans aren't a good way to deal with cash flow problems.

The interest is terrifying

If you thought credit card interest was bad, wait until you see the astronomical interest attached to payday loans. The amount that you'll have to repay is often buried deep into the small print but you can expect to pay something above $15 on a $100 payday loan. This might sound reasonable, but if you're already in a tight spot financially, that extra $15 could be just that little bit too much to pay back.

You need to pay it back on your next payday

This isn't a hard-and-fast rule that can't be broken, because it is possible to roll the payday loan balance over to the next month but you need to deal with payday loans as soon as possible if you don't want to get in too deep. Every time you carry your payday loan balance over to another month, you're racking up more and more interest - interest that you probably can't really afford to pay. Carry the balance over for multiple months and you could easily find that the interest becomes more than the original loan. If you're really unlucky, you might also get hit with charges for rolling over the balance to another month.

What else can you do?

If you're stuck for cash, payday loans might seem like the only answer to your predicament - especially as the advertising stresses the promises of fast cash (often within hours of applying), and this is always going to be incredibly appealing to anyone with money worries. Instead of turning to payday loans, think about what else you can do to access the cash you'll need to see you through. Perhaps you can get an overdraft from your bank, use a credit card (and pay off the balance in full as soon as possible) or borrow the money from family or friends? These alternatives might not give you the money as quickly as a payday loan but at least you won't be hit with terrifying interest charges.

The bottom line

Payday loans might look good on paper but it's an incredibly expensive way to tide yourself over when you're broke. It's fine if you use them responsibly and pay back your original loan plus interest as soon as it's due, but you can quickly get into trouble if you need to roll over the loan to the next month as the interest just keeps piling on top.


    0 of 8192 characters used
    Post Comment
    • Hello, hello, profile image

      Hello, hello, 

      9 years ago from London, UK

      Thank you for putting us wise. I thought that when I saw there ad.


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)
    ClickscoThis is a data management platform studying reader behavior (Privacy Policy)