You have probably seen them in storefronts downtown or in random shopping plazas along the highways. They have clever names that hint at how quickly and easily they can get you money. Some even suggest a level of patriotism. However, can a payday loan really be the solution to your problems?

In some states, payday loans aren’t even legal. However, Iowa still allows them, and the number of fast and easy quick lenders across the state attests to the popularity of the product. Nevertheless, many such lenders have received sharp criticism for their ruthless collection practices and the unscrupulous manner in which they prey on people who may be feeling pressured by money troubles.

Quick and easy

There’s no question that a payday loan is often quicker than most conventional loans. In fact, you may be able to obtain the money you are seeking in about 15 minutes. That’s because the lenders don’t bother with credit checks or other steps that slow down bank loans. Essentially, payday lenders want to know a few things, including:

  • You are older than 18.
  • You have a valid ID.
  • You have a steady income.
  • You have an active bank account.
  • You don’t have any bankruptcies, history of bounced checks or outstanding payday loans.

If you have everything in place, you can obtain a loan of up to $500 for a short period of time, usually less than a month. This may seem like the perfect fix if you are just a little short to cover your bills or other expenses before your next paycheck.

How it all falls apart

If you fell short the week you took out the loan, there is always the chance the same thing will happen before your next payday, leaving you with an additional bill to pay. Remember, nothing is free, and a payday loan typically carries a very high interest rate, in some cases close to 400 percent APR.

In the event you can’t make the payment, you may be able to roll it over for another term. However, if you fail to contact them for that option, the lender will likely deposit your post-dated check or make numerous attempts to withdraw the money from your account. This may result in multiple overdraft fees in addition to the fees you will owe the lender. There is every possibility that the lender will take immediate action against you, such as reporting you to credit agencies, turning your account over to collection agencies and filing civil lawsuits against you.

A real solution

Payday loans may seem like a fast and easy fix if you’re having a tough week, but chances are good you will end up in worse financial shape than before. If you feel yourself repeating a cycle of running out of money before bills are paid each week, you may find a better alternative in the advice of an attorney. A compassionate attorney can help you explore the options for debt relief that are most appropriate for your circumstances, perhaps including bankruptcy.