Most of us commonly find ourselves in a situation when it’s getting pretty tough to live within our means and cover the expenses between paydays. It may be because of any reason like an emergency car repair, an injury not covered by health insurance or a celebration event in the family. It happens to more people than you think and you are not living in an isolated world. Many people run out of money before the month ends and sometimes payday loans are the right solution in such cases.

If you are applying for a payday loan, make sure that you follow these 10 tips so that you don’t end up making a wrong financial decision or get scammed.

1. You should be at least 18 years old and must have a full time job. This will ensure that you have means to back the loan in your next payday.
2. You should have a steady income whether it is on weekly, bi-weekly or monthly basis.
3. You must have a checking or savings account. This will ensure that you receive and send money electronically.
4. When you are applying for the payday loan, you will need this information to prove to the lender that you are a trustworthy risk to their finance and have the ability to pay back your loan.
5. Be sure to check the loan company being legit. Don’t borrow money from a company that is not licensed in your state. There are large number of companies who do an illegal business and charge excessive interest rates and fees. Check the company with the BBB and the state attorney general’s office with no outstanding or unresolved complaints.
6. Clearly understand the terms of the loan for which you are filling up the application form and paying the fee.
7. Almost all payday loan companies have their website. You should go to their website and find out the fees involved and the interest rates being charged. They should be regulated under the laws of your state.
8. Make sure that you are aware of the penalties involved if you do not pay back the loan on time.
9. Read and understand the terms mentioned in the loan contract copy
10. If you don’t see the required information on the lenders website, it’s not a good idea to get a loan from that company. They are not disclosing the information which sounds to be fishy.

There is a mix of both legit and scam payday loan companies on the internet. You need to protect yourself by dealing with the right company. As you consider the above tips, make sure that you are aware of repaying back the loan and still cover next week’s bills.

Before you decide to close your bank account because of continuous debits from the payday loan companies, speak with your bank manager and know the policies regarding ACH transactions after the account is closed. Some banks do have the policy regarding ACH transaction that allows them to force open a closed account and allow the debit from any payday loan company if it’s done within a certain time frame after the account is closed. If your bank has such policy and can force open your closed account, you might end up owing a legal $1,000 bank charge and being reported to the chexsystem. You might have averted the whole mess by owing barely legal (or not at all legal) payday loan companies. The best thing to do is to go and meet with the branch manager in person and know about the ACH transactions after an account is closed.

Just in case, if you are dealing with a bank that has such policies, explain your situation to them. Don’t feel embarrassed. Show the letters sent to the payday loan companies revoking their rights to debit money out of your account. The best option will be to put your account on deposit only, an ach block, or on a hard hold before the account is actually closed in the final stage. Your bank can do one of these things. Don’t take their “no” as an answer. The good thing will be that any payday loan company trying to debit money out of your account won’t get through.

Closing an account is the best solution when you are dealing with so many illegal payday loan sharks on the internet. Leaving the account open gives them the chance to withdraw funds from your account. They go with different names, so blocking them won’t help because they will try to debit using a different amount. They might produce paper checks and run them through your account.

According to some state laws, a borrower can be prosecuted if you have defaulted on your payments and have closed the bank account. But that happens only if it can be proven that you have actually been committing some fraudulent activities. The best thing will be to check with your state attorney general’s office and the state banking commissioner’s office and know about the laws. You want to make sure that you are doing the right thing instead of creating more problems.

Whether you have a budget formally laid out or not, everybody budgets their monthly finances in one way or another. This system can work for you for quite some time, but if you have a financial emergency that can spell disaster for your budget. However, there are tools that you can utilize in a responsible manner and still make your monthly budget work such as payday loans or a cash advance.

When it comes to needing money on demand to supplement their monthly budget, consumers typically have two options. One is to get a traditional loan via a bank or credit union and the other is to get a cash advance or payday loans. What consumers should keep in mind is that if you need a long term loan, a traditional loan is more your speed. If you need a smaller amount of money quickly payday loans are a good alternative.

One important step to making sure that a short term loan works for you and doesn’t become another expensive burden of debt is to ensure that they pay the loan off within the specified amount of time. Payday loans are designed for short term use and the interest you are charged simply becomes too high when you begin to roll these loans over and extend them. The more you extend the loan the more expensive it will become. These loans are intended to help you get out of a financial bind, but just like any other loan, they can quickly add to your debt.

While debt can be a hard obstacle to avoid, doing little things each day can make a big difference. Try to consolidate all your debts, if possible, to once source and make one payment at the lowest interest rate. You can also downsize on everyday services such as cell phone plans, land lines to your home, cable or internet bundling, or simply having coffee at home or at the office instead of picking it up at your local coffee store. It may not seem like much at first, but over time it will add up and can get or keep you in debt.