There are a lot of myths that swirl around payday loans, some of them have merit, most don’t. My goal isn’t to tell you that you should get cash this way, I just want to help you understand your options better. There are lots of ways to get same day cash, and this type of loan is one of the most reliable ways to get that. Cash advance lenders aren’t very straightforward with how all of this works, so hopefully I can clear some of it up for you.
Myth #1 – They Check Your Credit Score
If payday loan lenders checked credit scores they wouldn’t get much business! There is a very small minority that does, but they are very rare. Instead, they do a mini-financial background check to see if you’ve recently had bankruptcies or overdrafted your checking account, as well as see if you have any outstanding payday loans. This is done by a third party company called Teletrack. There are a handful of lenders that don’t use this service, but you’ll tend to pay more for loans from these companies because of the higher risk.
Myth #2 – Payday Loans Are Very Expensive
This myth has some truth to it, but it depends on your perspective. If you have to choose between overdrafting your checking account or missing a payment on your credit card and a payday loan, you’re going to spend less and protect your credit score with the loan. If you need a payday loan for smokes and beer, then you’re going to waste a huge amount of money! The key is to budget out your finances ahead past the point when you repay the loan. If you’re going to be more broke then than you are now, it’s probably not a good idea.
Payday loans definitely have their risks. If you are going to have to rely on them, or even need an extension, you’re going to have some serious financial problems later. Use them once, don’t rely on them, and you have a good shot at staying safe.
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