Same Day Payday Loan - Borrower Beware!

A same day payday loan is a cash advance on a payroll deposit. Say you get paid around $800 every two weeks and your employer deposits your pay directly into your checking account. A same day payday loan company will call your bank to verify your account is open and the amount of your last two or three payroll deposits.

If they decide to make you the loan (which they usually will), you write them a check for the amount you want plus their fee. The fee is usually charged for every chunk of money you borrow; so if the fee is $15 for every $100, and you need to borrow $300, you write them a check for $345 and they give you $300 in cash. They agree to hold your check until your next payday.

If you can’t afford to cover the check by your next payday, your can choose to “roll over” the amount for another two weeks for another set of fees. If you do choose to rollover the payday loan, you now owe the payday loan place $390 for a $300 same day cash loan. This means you have paid $15 (the cost of the loan) for a loan with an interest rate of 391% annually.

Taking out a same day payday loan is only marginally better than going to a loan shark. No one will show up at your workplace after hours and break your legs, but most same day payday loans will do the financial equivalent without remorse.

They will put your check through before the guaranteed time, run your check electronically under a slightly different name if you’ve put a stop on it, clean out your entire account when you least expect it, and these are just a few of the nice things they do on a regular basis.

If you think you need same day payday loan you are wrong. What you need is credit counseling and in a social worker to help you sort out your personal problems and challenges.

Same day payday loan places know when you walk in the door that you probably won’t be able to pay back the full amount and that you probably won’t even ask them for the APR on the loan (the annual percentage rate on the interest) or read their contract or understand their fees for late payments and so on. All they are looking for is your active checking account information and you signature on the loan form giving them permission to raid your account at will.

Here are a few alternatives to going to a same day payday loan shop;

Ask your bank or credit union if they can provide overdraft protection on your account. If you are already badly overdrawn, call the loss prevention department of your bank and ask them if you can make payment arrangements and close the account down. Consider writing money orders and using cash until you are back on track.

If you really need a loan right away, see if you can get a short term loan through your bank or credit union first. If you have collateral (something of value like a car or a house) you may be able to borrow against that instead at a much saner APR. If you can’t get a reputable loan, consider pawning something. Yes, a pawn broker is actually a couple notches above a same day payday loan shop on the financial food chain.

If your money problems are chronic, try getting some credit counseling, and check out social services available in your area. Can you get help with your heating bills through your utility company? Can you qualify for food stamps? Do you have a personal problem like an addiction that is eating up your money? If so check out local resources for help getting a hold on that. If you keep overdrawing your account with your check card, cut up your check card. People lived for generations without check cards. Cash works too.