I’ve been getting some questions recently about payday loans again. People are hurting right now and struggling to pay the bills. There’s millions (literally) of payday loan websites out there, and you can get a quick payday advance on any corner of any major intersection it seems. So what’s the deal with these easy payday loans? Are they a scam? Are they legitimate?

First you have to understand what a payday loan, or cash advance, is. A payday advance is a short-term loan borrowed against your next paycheck and used to cover unexepected expenses. Most often a bill is due on Monday, but you don’t get paid until Friday, so you get a quick payday loan on Monday and pay the bill. You then payback the loan plus interest on Friday when you do get paid. It’s a pretty simple process.

What most people clamor about is the APR of these fast payday loans. It is true, the APR is usually around 400% or so in a store, even higher for online payday loans. But what these people don’t tell you is that you don’t actually pay 400% interest on your loan. A payday loan is only out for two weeks tops, not an entire year. So what’s the point in measuring its interest rate in years? Pretty silly. Normally people end up paying about 15-30% interest on their loans, depending on the lender. And since payday loans are, on average, about $300, you typically end up paying back around $350.

If you consider late fees, overdraft charge and bounced check fees, a payday loan can save you a lot of money. It sure beats missing a payment or bouncing a check sometimes. So while they may cost a lot, the aleternative costs even more. So payday loans may not be super cheap, but they are less expensive than you think, and they won’t cost as much as late fees and other finance charges.

So my advice is go get one if you need it. These are hard times. Money is tough to come by. Family members might not be open to helping you out. A personal loan might be your only choice. If it is, don’t fret. They are quick and easy. You can even apply for them online and have funds in your account by the next business day. I wouldn’t rely on payday loans or get stuck in a trap where you are always getting an advance on your paycheck though. As I posted earlier, avoid debt as often as possible. Payday loans aren’t really bad debt. Typically the debt is manageable and gets paid off very quickly. Just be sure you don’t borrow more than you can afford from your next paycheck and you will be fine.