Tennessee is considered the birthplace of the modern payday loan, where businessman Allan Jones opened the first national chain of payday loan lenders in 1993. Now nearly 30 years later, you can find payday loans or cash advances in 37 states across the country.

If cash advances are available where you call home, should you consider them? They may be a convenient option in an emergency, but they also have a reputation for being an expensive way to borrow. 

So which one should you believe? Take a look at these facts below to help you make up your mind. 

1. They’re Due Back Faster Than You Think

Payday cash advances earned their name for being due back by your next payday. This gives the average borrower about two weeks to pay it off in one lump sum.

A short turnaround can be challenging to handle, especially if your pay check is already stretched thin. If you wind up facing another unexpected cost before then, you may not be able to juggle both.

2.They Have a Triple-Digit APR

Your interest rate will depend on where you call home. If you live in Tennessee, for example, the average APR on payday loans is 460%.

Why would anyone knowingly pay that much for a loan? It comes down to your credit score. Anything below prime flags you as a potential risk to lenders, and the lower your score is, the bigger risk you become. 

Every lender has its threshold for this risk. Once you tip the scales, you’ll be denied funding. But until that happens, a financial institution will raise its prices to offset the possibility you might default. 

Everyone needs access to credit, even if they have bad credit. So if people in Tennessee believe high-interest payday loans are the only things available, they may borrow them despite a 460% APR. 

3.They Aren’t the Only Option for People with Bad Credit

If the thought of paying back everything all at once sounds too hard, you’re in luck. You have other options, even if you have bad credit. 

While payday loan lenders aren’t the only ones to raise their prices, they are the only financial institutions that expect you to handle these costs on such a short timeline. 

In states that have outlawed payday loans, you can find online direct lenders that provide installment loans. This option breaks up the cost of your loan so that you’re making smaller payments spread out over weeks or months. 

You can also find lines of credit, even if you live in a state like Tennessee that allows payday loans. A Tennessee line of credit comes with a minimum payment that can be helpful in emergencies. As a fraction of your balance, a minimum payment is easier to handle when money’s tight, and by paying it, you’ll keep your account in good standing. 

Remember these alternatives to payday loans the next time you face an unexpected repair. If you can’t handle a high APR on a short term, you can explore lines of credit and installment loans for assistance. 

Although a sudden emergency auto repair can put a lot of pressure on your finances, spare some time to set up a budget and your borrowing options. This step can help you determine if payday loans work for you.