I have a close friend who does a lot of work with payday loans. Apparently they’re all the rage in my state. What kind of makes me laugh is that he says that he’s in the ‘payday loans bad credit’ market… I of course have to tease him and ask him if that means ‘as opposed to the payday loans for good credit market’?

If you have good credit, you should never get a payday loan. They are designed specifically for people with bad credit and should only be used in case of emergency. I personally would do everything in my power to not use a payday loan. Why? The interest rates are out of this world. You can expect to pay over 500% interest on a cheap payday loan and triple that on a bad one.

When my friend tells me about his bad credit payday loan business, I laugh in his face and tell him to stop charging 8,000,000% interest.

Instead of taking out these loans, do everything in your power to restore your credit. Get a secured credit card. It won’t take you that long until you can get a real credit card and the interest rate on the credit card will be WAY better than it will be on any payday loan out there. Most credit cards are going to carry about 23% interest if you have bad credit and much less once you re-establish your credit rating. I personally pay about 13% interest on my cards – about the same as a signature loan from a bank.

Overall I would recommend to those of you that are thinking about taking out a payday loan to proceed with caution. These loans aren’t cheap and can put your finances into a really difficult place. Do everything in your power to rid yourself of debt. Most things aren’t really worth buying and debt can cause a ridiculous amount of stress on your life.

How To Restore Credit So That You Can Get Better Loans

1. Commit to pay your bills on time from now on.
2. Don’t skip credit card payments EVER.
3. Pay down your revolving balances as soon as you possibly can.
4. Maintain 4 credit card accounts with low balances.

Restoring credit can be tough for some people because you have to change your habits. Changing a habit isn’t easy to do. However this is one of the best things that you can do to protect your financial future. With bad credit you will always need to make a lot more money to live the same lifestyle.