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I am sure that many of you remember what a scourge crack has been to our community. It has destroyed many lives and family. One of the things that made it so dangerous is that it was cheap, easy to get and highly addictive. Are payday loans the financial equivalent?

I don*t believe they are. They are easy to get and highly addictive, but they are certainly not cheap. Many have Annual Percentage rates of over 5000%.

The Payday loan business has seen explosive growth. They are popping up all over the country. It some states they are actually illegal because of the high interest rate. Why in the world would someone pay this outrageous amount?

Many times individual have unexpected emergencies. Unexpected medical bill, car repairs and large bills can just be some of the nasty surprises that may occur. Many people just need a little help until they can get to their next payday. As long as the person can make the payment by then, it is not a bad deal.

The problem happens when people use these loans for non-emergencies. These could include sales, vacations and other things that don*t require immediate attention.

It is then compounded when people then are not able to the full balance due on their loan. When this happens they are *offered* the ability to extend their loan. Now for the bit of grace they will pay a huge penalty. And with most loans the penalty does not even count toward the principal of the loan.

The way the lender secures the loan is by holding one or more of your personal checks. You do have to have a checking account and a job to qualify for a loan. So not just everyone qualifies.

The problem that most people run into is that most people do not just use it once. They keep extending the loan. Then they go from one place to another. Many people have loans out with more than 5 companies.

The solution is to only use these loans for emergencies and as a last resort. If you do have to use them, make sure to pay them off as quickly as possible. The longer you renew the loan the bigger the hole you will dig yourself