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Sometimes finances can become so much of a burden that it is impossible to make it to payday. When this happens, payday loans might be the only option that you have to make the payment of bills on time. Payday loans, however, are a very risky practice. They are risky for a multitude of reasons, mostly because of what is expected when paying them back.
First of all, payday loans are usually issued at an extremely high interest rate. While you may be getting 100% of your paycheck, you may be expected to pay back as much as 20% interest to the company. In another instance, they may only give you 80% of your paycheck with the payday loans. You will be expected to give them the full 100% as soon as it reaches payday for you. Payday loans should only be used in dire situations when money is extremely needed.
Your first line should be directly to friends or family members that will loan you the money at little or no interest. Because you will be required to pay back so much money with the payday loans, resorting to them would be in your best interest. Payday loans will also create a rippling effect in your personal finances if you are not careful. If you are living paycheck to paycheck, a payday loan could set you back a couple of weeks. Because of the large expense in getting a payday loan, it is likely to happen again during one of the weeks to come. Once you become reliant upon the payday loans, it will take a large reassessment of your personal finances to get everything straightened out.