While reading through the site, you may realize that we are big proponents of the payday loan industry. We know they fill a void in the market and we fervently believe they help more people who are otherwise unable to find financial relief anywhere else. However, getting a payday loan today may not be the best solution for you. In what scenarios will it be best to borrow quick cash elsewhere?

1. You Have Pawnable Properties That You Don’t Need

If you have personal items like jewelry or extra appliance that you won’t be using much, taking them down to a pawnshop should prove a better financial option than getting a payday loan right away. Your rates are going to be better than a cash advance since there is collateral involved, allowing you an easier time paying it off.

2. You Have Family or Close Friends That Can Lend You The Quick Cash

If there is family nearby that you can visit to borrow from or even ones residing distantly that can wire you the cash, a payday loan should not even cross your mind. Family and friends should be more flexible with the payment terms and will likely give you the best rate just to help you out. Be careful though - not settling your debt can result in damaged relations.

3. You Have A Credit Card With Remaining Balance

If you have a credit card with usable balance, you can get a cash advance from an ATM instead. While credit card rates are steep, they should be just a little bit lower than a payday loan.

4. You Are Chronically Disorganized Financially And Another Loan Might Get You In Trouble

While a payday loan may be perfect for you if your credit is bad, it can get you in even deeper financial mess if you acquire one with the same disregard that you incurred your other debt. Get counseling and put your affairs in order before reaching out for a payday loan offer.

5. You Don’t Really Need The Extra Money

If you’re going to use a cash advance to pay for unnecessary expenses, think twice. Then think thrice. A payday loan, like any other debt, can have serious financial repercussions and handling them irresponsibly can get you in a bind. While it’s ultimately your decision, maybe it’s better to wait for the next paycheck before putting a down on that $5000 home entertainment system.

With all the badmouthing the payday loan industry receives, it’s easy to feel like an uneducated lynch mob is on the offensive.  Checking the numbers, it looks like a plausible reality.

Think payday loan offers take too much off its customers’ money?  Take a hard look at these numbers and compare payday loans to other lending alternatives that all of the industry’s opponents seem to lack relevant knowledge of.

In 2005, payday lending companies loaned over $42 billion in credit to its customers.  In return, they made over $4.2 billion in fees as profit.  That’s a 10% return on investment - not exactly what you expect from what the media has judgmentally christened “predatory lenders.”

Now, compare that against other financial services being peddled as designed to benefit consumers:

Consumers paid $4.2 billion in ATM service charges in 2006 to withdraw their own money

Consumers pay an estimated $22 billion in NSF fees to banks and credit unions

Banks collect an estimated $10.3 billion annually for overdraft protection services

Credit card interest total in the year 2000 was a little more than $87 billion

An estimated $57 billion in late bill payment fees were collected by businesses in 2003, more than 140 percent of the total estimated payday lending volume in the United States

Credit card late fee penalties totaled over $11 billion in 2005

If you find yourself in a financial emergency and in need of alternative sources for cash, look at your options and see how sensible a payday loan becomes:

$100 Payday Advance will net you $15.00 in fees
$100 Overdraft Protection damages you $26.90
Credit Card Late Fee on $100 Bill will cost you $37.00
Late/Disconnect Fee on $100 Utility Bill should take you for $46.16
$100 Bounced Check NSF/Merchant is a solid $54.04

Now, will choosing to get a payday loan really cost you more or save you some?

We’ve all heard the arguments about the evil of payday loans.  If it is to be believed, payday lenders seek to maim and kill their customers.  Who in their right mind would want to cripple the very people keeping them in business?

Sure, there are plenty of arguments to be made against the industry. The high interest rates attached to personal fast cash loans are well-documented, often-repeated and are just as excessive as they sound. This is especially true in states where no limits on interest rates are set on money lenders.

That’s to say nothing of the industry’s shady reputation for predatory practices, or the allegations of racism, ageism, and classism that opponents continually sling against the payday loan business during the course of its profitable existence.

However, some have claimed the industry’s alleged evils are nothing more than the industry’s rivals finding a flaw and flaunting it to the media.

Whether true or not, payday loans will never go away.  Banks, as a source of fast personal loans, just aren’t viable for the low-income communities the payday loan business serves.  Fast cash loans have a wealth of legitimate and helpful uses for their customers - the working class - and legislators should not be sidetracked by baseless appeals otherwise.

Unable to truly get rid of payday lending, the best bet for its opponents is to put a cap on interest rates.  Logically, this is the most likely scenario - help the consumers by keeping the businesses that keep them afloat intact while allowing them to pay more manageable rates.

Here’s one of the best comparison tables on Payday Loans in recent memory, making light of the comparisons being drawn by the media between payday lending and the 19th century version of industrial slavery, indentured servitude.

This table was taken from the Predator Lending Association (PLA) website, one of the funniest information resources on payday lending.  Visiting this site always leave me confused - are they being serious or merely poking fun at our industry?

Payday Loans	Indentured Servitude
Targets : Caucasians, blacks, and Hispanics	Targets : Caucasians only
A 21st century financial services solution	A 19th century financial services solution
Customer service oriented	Not customer service oriented
Provision for consumer bankruptcy	No provision for consumer bankruptcy
Unlimited term of “service”	Typically limited to 4-7 years of service
Work anywhere customer wants	Worked only on the farm
Rarely serve prison sentences	Debtors’ prison
Geographic and demographic information systems help targeting	No targeting whatsoever

People view payday lenders in one of two ways: they are either heavily liked or extremely hated.

Those who are opposed to them believe that they are only out to take advantage of low-income families. They argue that the high interest rates charged on the loans are meant to keep the borrower in debt. Numerous consumer advocacy group and private organizations such as Arkansans Against Abusive Payday Lending (A.A.A.P.L.) are pushing for tighter legislation on payday lending.  They are aggressively lobbying for their demands and some are even taking to the streets.

The payday loan industry, however, is not taking it without a fight.  Businesses in the industry are charging back.  Recently, they launched a media campaign to educate and to cultivate a better image for the payday loan industry. Lenders believe that they perform a vital service to the community, assisting low-income families in their daily spending.

The payday industry is worth $40 billion a year.