National Payday Scholarship 2012 Official Entry SealBy: Barbara Zickau

Short term financing can benefit a person’s life in many ways. How many times have you found yourself with an emergency that needs to be taken care of but payday is a week away? What have you done to locate the funds? Have you borrowed from friends, family, taken out a loan at the bank or a last resort took out a payday loan? All of these options will allow you to meet the payment when it comes due, but which option allows you to feel that you are actually doing this without help? A bank might reject the loan application or if you ask for help, you might feel that your family and friends are looking down on you for something that you had no control over? Generally, most people will say a short term loan is their only option in an emergency. While, short term financing, via a pay day loan, does have the highest interest rate of all the options mentioned, it is the route does allow you as a person to feel that you are handling your life, by yourself, without help from relatives.

If a payday loan is the option that you determine to be right for you as a consumer, borrow only the needed funds and then repay as soon as your paycheck is available, to meet your short term needs. Many times, you can apply from the convenience of your home via the internet and can obtain up to $1500.00 to meet your needs and depending upon the site, you can have the funds in as little as 1 hour. If you apply online, you do not have to run into friends, family or neighbors at the local short term loan shop which often can only loan up to $445.00 at a time. For that amount, you will have to pay back $500.00. Both the online sites and the local stores use your income to determine how much you are eligible for with the short term loan. The amount of interest is based upon the amount of your loan and does increase as the amount goes up. To repay the loan, you have the option of paying it off with your next paycheck, paying the interest fee plus an amount toward the loan or paying the just the interest thus refinancing the loan amount until you can afford to pay the balance in full. As a consumer, you need to be aware that you have to budget the amount out of your paycheck as they will automatically deduct it, if you go through an online site. At a local store, you do have to pay the balance in full out of your paycheck but depending upon the amount you wrote for, you may be able to rewrite again for another loan, if needed. Financial emergencies can happen to anyone at any time, through no fault of their own.

For a person to be successful with short term financing, via payday loans, they need to determine their budget and pay the loan back instead of incurring fees each paycheck unless the person was determined to be eligible for a higher amount then the local store can loan. If this is the case, the person should make the interest payment as well as an amount toward the balance to get it paid off as quickly as possible. This way, the consumer saves the interest that would keep being charged if the interest payment was the only amount that was paid on each pay period. Keeping your head on your shoulders as well as only taking a loan for the amount that you actually need and repaying as quickly as possible will allow you keep your goals and dreams on track. Keeping your mind set toward the goals that you have determined will allow you to be successful with short term financing and allow for the ability to borrow again, when needed for another emergency.

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