With the economy going downward and more and more people thrown in financial insecurity, it can seem like salvation to have instant access to quick loans. Many people turn to them, either to cover monthly costs they cannot cover with what they earn or to deal with unexpected emergencies. But are these payday loans actually a solution or the start of something worse? Learn about payday loans, what they are and what the risks are so that you will be able to make an informed decision before you throw yourself head-on and end up in a situation you can’t get out of.

Instant cash at your disposal – really?

It is easy to think of quick loans as instant cash you can take advantage of every time you are in a rough spot. You don’t need good credit score, you don’t have to prove to the lender that you can afford to repay the debt and do you don’t have to make and income declarations. With just signing a post-dated check you can get several hundred bucks with no hassle and solve the emergency, and you will eventually pay it back, or will you?

While it is easy to get quick loans from payday loan stores, getting them is almost never a solution. First of all, you will have to repay them within two weeks or so, and if you are already struggling to make ends meet with your low income, how do you expect to deal with your regular expenses plus paying back the money you have just borrowed?

The pitfalls – just how much could you end up paying?

So if you are borrowing money from a payday loan store just so that you can catch up on rent or make the mortgage payment on time, then turning to quick loans is not the solution. This is because it will not solve the main problem in the first place. The main problem is that you are not earning enough to cover monthly expenses, and getting a payday loan simply isn’t going to address that.

On the contrary, a payday loan will only make matters worse. While the usual fees might not sound like too much, your inability to repay the debt on your next payday will eventually result in you paying a lot more than you borrowed. With the typical fees hovering around 20 percent for two weeks or so, you can imagine that the debt can skyrocket in a few months. While it is not your plan to end up paying many times the initial loan, you may just be unable to pay the quick loans you have borrowed unless you have found a solution to the financial problem that forced you to turn to payday loans in the first place.

Is there a better solution?

As most financial experts and advocacy groups say, payday loans should be avoided at all costs. This is because they don’t address the main cause of the problem and they are extremely expensive, perhaps some of the most expensive loans that ever existed. If it’s a genuine emergency that you need money for, then taking a payday loan might be a solution, but only as a last resort. There are better ways to obtain a loan, and on the other hand, why haven’t you started an emergency savings account?

If you are going through tough times, then payday loans aren’t going to help you get past it. Finding a second job might not be the solution you were hoping for if you have a tight schedule, but at least you will manage to get out of the rough spot. There are also other alternatives such as peer to peer lending services, keeping an open credit card or even building credit to borrow from mainstream borrowers, anything to quick loans which can cause more trouble than good.