• The Pros & Cons of Payday Loans



    With hundreds of stores in town, getting a payday loan in Las Vegas isn't a difficult task. But just because something is easy doesn't necessarily mean that it's a good idea. Conversely, the payday loan has something of bad reputation because the terms of these loans are generally much stricter, with much higher interest rates and fees than their conventional counterparts. And just because something has a negative image doesn't necessarily mean that it can't be useful when used responsibly.

    Below are objective facts about payday loans that you should know before you decide whether this is the right course of action for you.



    Pro: Payday loans are convenient.
    Generally speaking, all you need to qualify for a payday loan is a steady income, a state-issued ID and a checking account. When you walk into a payday loan store, the chances are high that you'll walk out with some cash to pay your bills in less than an hour.

    Con: Payday loans are expensive.
    The cost of the money borrowed from a payday lender would be prohibitively expensive if these loans had the same repayment terms as their conventional counterparts. The annual percentage rate of interest on a payday loan ranges from roughly 200% to 675%. But since these are short-term loans, you generally repay only $7.50 to $25 per $100 you borrow. That may not seem like a lot, but when you borrow more than $1,000, it can add up quickly.

    Pro: Payday loans are available to people with poor credit.
    Often, the reason many people turn to payday loans is because they cannot qualify for a conventional loan because their credit score is damaged. By and large, payday loan services do not check their customers' credit scores.

    Con: Payday loans are not a long-term financial solution.
    If you're looking to get a payday loan, chances are your financial situation isn't good. While getting an influx of cash may alleviate your problems in the short term (a matter of days), it cannot fix the underlying problems that led you to a situation in which you needed such a loan in the first place.

    Pro: Most payday loan stores are professional, upstanding institutions.
    This industry has grown substantially in the last two decades. Payday loan institutions have matured from small operations to large chain and franchise establishments. A natural consequence of this is that management and the market have cultivated stores that look and feel like regular banks. Additionally, the employees who run these stores are professional and courteous, and they treat their customers with the respect they deserve.

    Con: Some payday lenders are dishonest.
    Unfortunately, there are some bad apples in the payday loan bushel. These charlatans should be easy to spot because they behave like loan sharks rather than legitimate businesspeople. A good rule to follow is that if you ever feel uncomfortable borrowing money from a payday lender, don't do it. There are hundreds of other scrupulous lenders who will gladly take your business without ripping you off.


    Nobody every wants to be in a situation where they have to take out a payday loan to make ends meet. It's good practice to avoid them whenever possible, but there are times when payday loans are the only option available. The good news is that there are plenty of companies to choose from, and you have the luxury of being selective about which lenders you do business with.

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