| Payday Advance companies often come with | | | | personal check, from her bank. Some times she |
| enticing ads such as "E-Z Payday Cash..." Cash at | | | | may roll over the check by paying an additional |
| your doorstep on the same day.. etc. on the FM, | | | | fee to extend the advance period, say, for |
| TV, Internet, and in mailboxes. And they come up | | | | another two weeks. In case shes left with no |
| with a range of words such as cash advance | | | | money in her account to cover the personal |
| loans, check advance loans, or deferred deposit | | | | check she submitted to the lender, she could incur |
| check loans. They are indeed easy to secure. But | | | | additional bank fees or face legal action, for the |
| are they economical? | | | | bounced check. |
| Let's imagine someone named Ellen borrowing | | | | It is advisable to plan finances carefully by |
| $300 from a lender creditor for a two weeks | | | | following a few steps as follows: calculating the |
| period. According to the agreement, she writes a | | | | total `income and `expenses amounts in a month, |
| personal check to the lender for $345 (this | | | | subtracting the `total expenses from `total income |
| includes the borrowed amount $300 and a $45 | | | | and monitoring the remaining amount. This simple |
| fee). | | | | arithmetic will tell us as to whether the person has |
| In the above example, the interest fees of $45 is | | | | some savings or not. A financial barometer! |
| the equivalent of $1,170 for a year, or 390 | | | | By depositing 10% of the total income into a |
| percent APR. This is far higher than the APR | | | | savings account or other kind of investment. This |
| announced by institutions such as Bank of | | | | will serve any `rainy day. |
| America for loans. But the latter require collaterals, | | | | By not spending more than what is earned. |
| real estate to mortgage or some other security. | | | | Despite meticulous planning, we do sometimes get |
| Not easy for everyone. | | | | into emergency situations like Ellen. This is the |
| On the ensuing payday, she either redeems the | | | | time, when we can look for an Emergency |
| check by paying the $345 in cash, or lets the | | | | Payday Advance as the last resort. |
| lender withdraw the amount, by using her | | | | |