For some a payday advance loan can be a lifesaver while for others it can be a real nightmare. When one is in need of fast cash and a paycheck is still to far off a payday advance can help you in a pinch. But there is a high cost to these payday advance loans in the terms of the financial charges that are applied to these loans.

The average finance charge for a payday advance is around 15 to 30 dollars per 100 dollars that you take out in a loan. If you obtain a 400 dollar loan and take the lower end of the finance charge of 15 dollars you’re looking to pay back 460 dollars in a week or two week timeframe depending on what your pay schedule is for your job. If you have the money and will not affect your lifestyle by doing this then a payday advance is a life saver in those times of need. But if you find you are unable to pay the full 460 back to the payday advance company you will find yourself into a financial mess that ends up costing you a ton of money.

If you find yourself unable to pay off your payday advance loan what will happen is when you get your paycheck the payday advance company will ask you to pay off your loan the full 460 dollars and then reapply for the loan right away. You will then be given another loan for 400 dollars. You will have already paid 60 dollars for the first loan. This can end up being a repeat habit for a weeks and even months till you save up enough money to pay off your payday advance loan with out effecting other bills or needs in of your lifestyle. When you sit down and add up the true cost of your payday advance you will learn that borrowing 400 dollars over a months time on a

weekly pay back schedule turns out to cost you in the end an average of 240 dollars and that’s if the payday advance company does not raise your finance charge due to the fact that you can not repay your loan on time. Now that scenario was looking at the possibilities that your finance charge is only 15 dollars per 100 dollars that you borrow. If your on the higher end and accepted the terms and of paying back 30 dollars per 100 you are looking at paying back 480 dollars for borrowing 400 dollars if your terms were set for a weekly pay back and you needed to refinance your loan 4 times.

A lot of people find themselves in debt to payday advance loans because of the need for money for an emergency but finding they do not have the funds to pay back their loan once all their bills are paid. Out of desperation some people have been known to even obtain a second payday advance from another company to pay off the first company. What they do not realize is they are just switching the problem from one company to another.

It is always wise before obtaining a payday advance loan to sit down and budget your money to see if a payday advance is the right way to go for your lending needs.