We live in an age of scammers. There are folks pretending to be Nigerian princes, people accepting donations for fake charities and identity theft. These practices are illegal, and law enforcement sometimes have a hard time just keeping on top of complaints, much less catching the crooks that perpetrate these crimes.

The payday loan area is no different from other areas in that there are scammers pretending to offer a real product but who are actually just trying to steal your money. Unfortunately, some people come to believe that all payday loan businesses are shady, and are part of a scam.

Of course, you need to recognize when you’re facing a scam. Any time that someone asks you to give them money before they give you a loan, you might be facing a scam. The one obvious exception is a home loan, where you have to pay closing costs and such associated with the mortgage before it’s all finalized.

Payday loans are legitimate, and in most places they are legal. Having said that, they’re also undesirable. If you can avoid taking a payday loan, you should.

Why is that, exactly? Well, payday loans charge extremely high rates of interest. The percentage you pay for a payday loan is likely to be as much as ten times or more then amount of interest you’d pay on even the highest-rate credit cards.

Another reason payday loans can be undesirable is because the term is so short. At first, this seems like an advantage. The short term means there is less interest charged, overall. The problem is that most people who take out a payday loan do so on the same loan more than once. On average, it takes three pay periods for a payday loan to be paid off, which significantly increases the amount of fees you’re going to be paying.

Yes, payday loans are legal. They’re legitimate. They’re also a measure of last resort. Before you take out a payday loan, make sure you can’t get the money anywhere else, and make sure that you absolutely can’t wait.

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