Loans, debt, and personal responsibility

I’m not sure why my occasional sponsor keeps sending me topics in which I’ve got very little personal interest. I do have opinions about this, though, and (gladly) very little experience on the theme for this post.

So, the advertiser Payday Loans offers, well, credit for those who need just that extra bit of help when they’re short of cash. They will extend you a loan with no credit checks and no faxing required.

I do have a very strong opinion about getting into debt. Debt is vital to keep turning economies over, as far as I’m aware. Which is fine as long as the debt is managed responsibly. Unfortunately, as is very clear from many teevee ads, the aim of many finance companies is to keep you in debt and forking over the minimum payments for the rest of your natural life.

Sure, now and then people may come up a bit short and need a cash advance. And if these people are generally responsible about their personal finances, getting a short-term loan to cover a shortfall may be sensible (assuming dipping into your savings ends up costing you more in interest lost, and that might only be the case if you’ve got an incredibly high interest account). As long as it is paid back ASAP.

It is the responsibility of the loan client, not the finance company — a profit-driven entity — to make sure that they can afford to repay the loan, and not get deeper and deeper into debt. This is not free money. In fact, this money involves a higher repayment because the finance company is taking a higher risk!

This post is sponsored.

• 27 Nov 2006

• Thinking