Payday Loan Times

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How to Avoid Payday Loans; Shop Around for Cash Advances When Necessary

Filed under: Advice, Alabama — J.J. Cameron at 7:03 am on Wednesday, July 26, 2006

Dr. Marvin Copes is an Education/Community Service Volunteer for AARP Alabama in Maylene. He recently wrote about the instant payday loan world, how to avoid applying for these resources and where to turn if you needed them …

Let's start with ways to rid yourself of debt: Contact your creditors to see if they will give you more time to pay your bills. If they agree, you can pay these balances when funds are actually available. Maybe Need Help?borrow from a friend or family member.

If a payday advance is unavoidable, however, be sure to shop around. Although payday loans may be the only option for certain borrowers with poor credit, you may be able to find a bank or credit union that will approve a small loan with a reasonable interest rate. Compare both the APR and the dollar amount of the finance charge.

More financial advice: Consider getting overdraft protection on your bank account. You will avoid returned check fees and have a cushion in financial emergencies. If you own a credit card, try taking a small cash advance out on it.

If you find you are just a little short of cash each month or can’t pay unexpected bills, take a hard look at your income and expenses. Is there any way that you can develop a modest savings plan? If you track where you spend your money, you may find ways to save. Are there some purchases you don’t have to make? Think about it.

With just $300 in a savings account, you may be able to handle a financial emergency without going to a payday loan company. If you can do this, you can avoid high payday loan fees AND earn interest on your money until you need it.

Finally, if you need help preparing a budget, you can get it from a nonprofit credit-counseling agency or cooperative extension agent in your area. The overall idea is to look around before just settling on a cheap payday loan - and then being smart about this decision once you do have to make it.

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