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To begin, it is important that you understand that payday loans should be a last-chance option. Of all of the loan opportunities available to you, chances are, a payday loan will have the highest interest rate and strictest terms. Coupled with that, the payday industry is notorious for fraud and scam, so you must be very very careful.

That being said, there are the rare occassions where a payday loan is essential to survival – whether it is dealing with an unexpected health condition, or paying off an unexpected bill or two. One opportunity to steer away from, however, are no-fax payday loans

While it may seem as if time is of the essence, it is important to remember that 100% of the risk a lender takes will be passed right back to you. Unless you are 100% certain of your ability to repay the lender before the interest rate gets to you, then you should highly consider opting for a payday lender that requires some form of proof-of-employment beyond simple pay stubs.

More importantly, you should recognize that you are not only covering your own risk, but covering the risk of everyone else who uses the service. Good customers like yourself bear the burdens of the bad customers from whom they cannot collect.

In a worst case scenario, sure – it can be a last-ditch source of immediate income. But be careful, there is a reason why Payday lending has recently come under the scrutiny of the federal government and Congress.

This Financial Services article was written by Russ Jones on 9/10/2008

Russ Jones is a financial services expert.