Wait! Can you get payday loans online in your state?

Are payday loans allowed in your state? Because people can sometimes get into a cycle of perpetually borrowing their next paycheck, or get roped into paying just the interest fees every few weeks instead of paying back the entire amount of the loan, some states have taken action to limit interest rates and fees that payday loan lenders can charge. Some states go even further and have banned payday loans all together. States like Arizona have decided to outlaw payday loans. So, for residents of Arizona, even payday loans online are not an option.

However, because the need for short term borrowing was still in demand, lenders have found a way to make it happen, even in states like Arizona. The only catch is that you need to have a car.  Auto title loans are on the rise in Arizona. While the APR is less than that of a payday loans, it is still over 100%. That means that if you take a year to pay the loan off, you will be paying double the amount for the loan.  If you borrowed $1000, you would not only have to pay the $1000 back, but pay another $1000 in interest for a total of $2000!

Because auto title loans only use your car as collateral, the burden of paying the loan is up to the borrower. It is often not automatically taken out of your account at your next payday like an online payday loan. Instead, the borrower has to remember to make the payments each month. Like a payday loan, make sure that you can quickly pay back the loan and still have enough for your other bills and living before you go into debt. Even people who make a plan to quickly pay back the loan find that they are paying a lot of interest, so if you have another option, like a credit card, consider using it first.

While getting into debt using a credit card can be just as difficult on your finances, it at least usually has a much lower interest rate. The temptation with credit cards is to pay the minimum balance, which is often a very small sum each month, but doesn’t pay of the balance very quickly. If you need some quick cash and are considering using a credit card, make a plan to pay it back quickly and stick to it. Sometimes unforeseen events happen and you need money up front, but if it is becoming a habit, get some free credit counseling and figure out how you can stop owing people money.