The biggest advantages of a payday loan are that it is quick and easy and you don’t have to have good credit. If you need money to cover an emergency, you can have the cash in as little as a few hours. The biggest disadvantage to a payday loan is that it is costly.

Through no fault of their own, people sometimes need to solve immediate financial emergencies and have no means to get money from standard lenders and banks. Friends and family may not have resources to help out by giving a personal loan.If they have bad credit, the borrower may not be able to get an unsecured loan.

Payday loans can be secured based on proof of employment and a bank account. Payday loans do not require checking into your credit history, so even if you have bad credit, it won’t matter to the payday loan lender as long as there is proof of a regular income of some kind. Even small business owners who have a hard time securing bank loans can get a payday loan as long as they can show regular deposits made into a bank account.

An advantage to a payday loan is that you could quickly and easily borrow from $100 to $1000 and if you pay it off when you get your very next paycheck, your fees won’t be very high. Another advantage is that if you cannot pay the payday loan off right away, they will allow you to pay an extra fee to extend it another time or two.

The disadvantage to extending the payment period of a payday loan is that the fees add up and become harder to pay off. The borrower then finds that he/she needs to get another payday loan to pay off the first, and then a dangerous cycle has begun. Fees and interest rates of the payday loan become so high that it becomes next to impossible to ever pay off the payday loan.

A disadvantage to a payday loan is that it could take years and a great deal of money to pay off what started off as a very small short-term payday loan. Payments get applied to the interest only and not to the principal or original amount of the payday loan.

Payday loans are designed to help lower to middle class customers with short-term emergency loans. At the same time, they are designed to generate money for the payday loan company.

Payday loan stores are not considered to be money predators by the Federal Government though some organizations may disagree. Payday loan stores target minority neighborhoods with lower income or younger customers who don’t have a grasp on their finances.Payday loan companies also target people with bad credit and people who have used payday loan companies before. These people can fall into the trap and end up paying large amounts of money to the payday loan stores over several years.

Before you choose a payday loan store, be sure to weigh the advantages and disadvantages. Consider your options. Do a review of all your assets and your finances. If a payday loan is your only recourse, carefully choose a reputable payday loan store and pay your loan off quickly. The advantage will be that you will not allow a short-term loan from a payday loan store to hurt your financial health, or hurt your family, or wreck your life.