How to Make Payday Loans Work for you Instead of Against You

Avoiding problems with payday loans in Illinois


The car’s transmission just quit and there’s still two weeks until your next payday. Your child has come down with an illness but you don’t have the money for a doctor’s appointment. For some Americans, these crises are resolved by resorting to credit cards, installment loans or help from family members.

But what happens when these resources aren’t available? When an unexpected expense arises, some Illinois residents may turn to a payday lender out of necessity. How do you take advantage of the benefits of payday loans without falling deeper into debt and an even worse financial situation? Avoid these common pitfalls when using an Illinois payday lender:

Pay the balance off as soon as possible. Payday loans are often advertised as a way to “bridge the gap” between pay periods. So long as a borrower only uses what he or she actually needs and pays the loan off when it is due or earlier, a payday loan may make practical sense. However, with some payday lenders charging $15 or more every two weeks per $100 borrowed, a payday loan can quickly cause problems if the borrower renews it after the initial due date, or borrows more than he or she actually needs.

A $250 payday loan, borrowed for two weeks, would result in approximately $37 in fees over the initial two-week period. If the loan is rolled over for another two-week period, that $250 loan has now cost the borrower $74 in fees. If the borrower did this for six months, that $250 loan will have cost the borrower nearly $450 in fees alone. Use payday loans for very short-term credit situations only, and you will avoid being consumed by the high fees these loans carry.

Borrow only the amount that you need. Payday loans should only be used to get you through the immediate problem you are facing. If you need $100 for a doctor’s visit, for example, only borrow the $100. Borrowing more will result in higher fees, increasing the likelihood you will need to renew your payday loan at the end of the term.

Payday loans can be a practical option for cash-strapped Illinois residents with unexpected expenses. Properly managing these obligations is key to making sure payday loans do not cause more financial problems than they solve.


Use payday loans for very short-term credit situations only, and you will avoid being consumed by the high fees these loans carry.

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