Payday loans can be an enticing option for those in need of fast cash, but they come at a high cost. They should only be used for nonnegotiable expenses and should never be extended to cover unnecessary purchases. Instead, check out a buy now, pay later app or credit card.

They were created for small emergencies

Unlike a bank loan, which requires you to jump through hoops and provide a mountain of documentation, payday loans are quick and easy. You can apply online or at a storefront and wy receive the money within minutes. But be careful: the loans are short-term, and the fees can quickly spiral out of control.

Payday lending has come under criticism, and some states have outlawed it. But it’s still widely available, and it serves a need for many working people. For example, Bishop Stephen Blaire of Stockton, California, decried how payday lenders "take advantage of working people who do not have enough money to meet their basic needs."

When she was struck by a car, Ms. Martinez needed to repair her vehicle, but she was short on cash. She took out a payday loan and agreed to pay it back, plus fees, within two weeks. But she couldn’t repay it in time, and the debt accumulated.

They’re a short-term solution

Payday loans are designed to help people cover emergency expenses between paychecks. However, they can be costly and lead to a cycle of debt. In addition to high fees, payday lenders also charge excessive interest rates. These high fees make it difficult for many people to get out of the cycle.

Unlike traditional personal loans, payday loans typically don’t require credit checks. Instead, the lender will run a check or withdrawal from your bank account for the amount owed. If you fail to repay the loan by your next payday, the lender will extend it and charge you additional fees.

If you are short on cash, consider asking a friend or family member to lend you money. Some will be willing to do so without charging any interest. You can also use a "buy now, pay later" app like Affirm or Afterpay to split up an expensive purchase into smaller payments. If you can’t borrow money, consider reaching out to a community organization for free assistance.

They’re easy to get

While payday loans offer fast cash and do not require a credit check, they have high interest rates and fees. In addition, borrowers are required to pay the full balance with their next paycheck, which can cause financial hardship. A better option is a personal loan from a bank or credit union, which offers a lower interest rate and typically allows borrowers to manage their borrowing online.

According to Pew, most payday loan borrowers use the funds to cover basic expenses, such as rent and utilities. However, borrowers often fail to repay the debt on time, leading them to borrow again and pay more in fees.

If you need money before your next payday, consider a cash advance from your employer or an alternative to payday lending. Many community organizations and nonprofit agencies offer free credit counseling, which can help you find a more sustainable payment plan and avoid expensive payday loans. You can also try "buy now, pay later" apps like Affirm and Afterpay to split up a purchase into installments and WY avoid paying interest or fees.

They’re a good option

Payday loans are high-interest, short-term credit based on your income. They typically require you to write a postdated check for the amount you borrow plus fees and interest, or authorize an electronic withdrawal from your bank account. You can often roll over or renew your loan, depending on state laws. Some lenders also offer "buy now, pay later" apps that allow you to split up an online or in-store purchase into multiple payments, with a much more reasonable fee structure.

While payday loans are easy to obtain, they can lead to debt traps. Pew reports that three-fourths of payday borrowers struggle to afford basic expenses, and many end up paying more in fees than the original loan amount. It's best to avoid them unless necessary, and consider alternatives like personal loans or credit cards with lower interest rates. If you have family or friends willing to lend you money, Jackson it's always a better option than payday loans.