I Saved Money with a Payday Loan

I saw it coming

After eight months of unemployment, I finally landed a job. But by then, I had been sliding on my bills for a few months and it was time to pay the Piper. It may seem ironic that my financial situation sank to its nadir after I started working again. But I had been skimming by on my meager savings, and as time passed I started to push bill-paying to the absolute deadline I would pay the utility bills just before my service was scheduled to be cut off. I would pay my rent on the last day of the grace period.

By the time I finally found a job, I had no money left. I had built up some some lag-time in my bill paying system, but luckily, it didn’t catch up with me until after I had been working for about six weeks.  And then the utility cut-off notices started coming in. I juggled the bills for the first month (and the first two paychecks), but I was faced with the stubborn fact that my paychecks were a little too paltry to get me caught up. So I found myself looking for an online cash advance loan.

I had nowhere else to turn

I never thought I’d be in that situation — shopping for a payday loan. I’ll admit I was ashamed, but I don’t have credit cards or anyone to turn to for financial help. My financial downturn started when I moved to a new city about a year ago. Economically, it wasn’t a good time to move. But I had the opportunity and the ability to go, and I’m not one to let a faltering economy dictate my life choices.

Still, it wasn’t a smart move. I had a lot of difficulty finding a job. I finally found some part-time work as a cashier at a neighborhood market. Then things got worse. I had been working only three weeks when all the part-time employees were laid off.  I had been self-employed before moving and hadn’t been employed long enough in my new location to collect unemployment compensation.

I finally found a job

Some 148 job applications and eight months later, I finally landed a job. I had made it through eight months of unemployment by stretching every dollar of my savings to the limit. I hadn’t borrowed any money or bought anything on credit, but still, I was sinking financially. Unfortunately, I wouldn’t get my first check until almost three weeks after I started. So I had to keep pushing those payment deadlines.

A small payday loan kept the wolf from my door

By the time I was due for my third paycheck, I couldn’t pay any bills at all. Everything was due at once. What I needed was just a little more money right now. I got a $250 instant payday loan, and as soon as I did, I could see the light at the end of the tunnel. The loan was automatically deposited to my bank account at about the same time as my regular paycheck.

I used the $250 cash advance to pay the minimum amounts due on all my utilities, and I used my paycheck for the rent. The loan will be repaid by an automatic deduction from my next paycheck. I’ll use the balance of that paycheck to pay my car insurance and all the remaining balances on my utility bills. I’ll even be able to get my hair cut. I’ll still be living hand-to-mouth, but at least I’ll be back in business.

I cut my losses

Without that payday loan, I’d be in a real mess. I don’t know what I would have done about the utilities. I suppose I would have spent a good deal of time on the phone begging utility companies for mercy. If I couldn’t work out something with the utility companies, I’d have been looking at hundreds of dollars in hook-up fees and deposits. I’d have had to pay my rent late, and that would have been an $80 late fee. I’d also have had to pay my car insurance late, which would be another $10 late fee. I probably would have been forced to float a check at the grocery store, and if I had miscalculated the time it took for the check to clear the system, I’d have been looking at a $42 overdraft fee. It goes on and on.
I’m paying $37.50 for my payday loan. According to the truth-in-lending statement, that’s an annual percentage rate of 614%. I’ll admit that’s a hard fact to swallow. But had I paid my rent late by just a couple days instead of getting the cash advance, my landlord’s fee would be more than twice that rate. And that’s even harder to swallow.

I’m in the open

Or at least, I’m out of the thickest part of the woods. Everything will be paid on time, and I won’t have to risk bouncing any checks. Two paychecks from now, I might even be able to put a little away in my savings account. I know there is a lot of contentious debate circulating about payday loans. Unless you’ve been to this place for yourself, you’re not likely to understand the significance of a measly little $250 cash advance. But I’ve been there, and that payday loan saved me from real financial trouble.