If you need to borrow less than $500 and are wondering whether you should apply for a payday loan or just pawn one of your valuables, you have to weigh your options. Pawn shops aren’t going to give you very much for your valuable items because they have to  make a profit. That means if you need $500 or less, you’ll need an item that’s at least $1200-$1500. In addition, you have to pay back interest fees and more. Also, the loan lasts anywhere from 30 to 90 days.

Payday loans carry extremely high interest rates. You may be in debt anywhere from 6 months to a year, so keep that in mind as well. If you’re unable to pay, they may take legal action against you by garnishing your check. Neither one is an ideal option, but it’s important that you’re aware of what you’re getting yourself into.

In Dead End Loans You’ve Got To Avoid: Part 1 and Part 2, you had a chance to see the bad side effects of pay day loans, car title loans, credit card cash advances, casino loans and pawn shop loans. In part 3 we are going to cover other kinds of loans that may end up leaving you worse than where you started.

1. Overdraft Loan – If you have overdraft protection from your bank, you can basically overdraft as much as the bank allows for a hefty fee. The fee per transaction usually runs anywhere between $29 and $35 dollars per overdraft occurrence.
2. Installment Loan – Installment loans are similar to payday loans. Borrowers are able to get anywhere from $200 to $1000 often in just 24 hours. The interest fees are astronomical, but unlike payday loans, payments usually stretch out over 6 to 12 months. If you default on these loans, the lender may take out a huge sum from your checking account. For many, this can be over half of their paycheck. Many times the payments seem to never put a dent on the loan balance.

Avoiding the loan types listed in this three part series is the most ideal way of protecting yourself from getting into a financial nightmare.

Financial binds can trap anyone, but before you go out looking for a loan there are some options you may never want to consider. In Dead End Loans You’ve Got To Avoid: Part 1, we covered payday loans, car title loans and tax preparer loans. Now in part 2 we are going to cover some other kinds of loans you may want to avoid.

1. Pawn Shop Loan – Many pawn shops will take personal items such as jewelry and other valuable merchandise and use it as loan collateral. If the loan isn’t paid in time, you run the risk of losing the item all together. The interest rates can be very high and people sometimes end up paying more than the market value of the property.
2. Credit Card Cash Advance – These loans can feel so easy because they are instant, but the interest rates and other fees are high.
3. Casino Loan – Some casinos offer interest-free lines of credit that can only be used for gambling. If you lose more money than you can afford while gambling, they can place a lien on your property.

In Dead End Loans You’ve Got To Avoid: Part 3, you’ll see other financial instruments that you’d be better off staying away from.

A tight financial bind usually pushes people into making desperate financial decisions. Those decisions usually show up in the form of loans. While not every loan is bad, some loans should be avoided at all costs. In part one of Dead End Loans You’ve Got To Avoid, you will see three kinds of loans that could leave you in a worst off position than where you started.  

1. Pay Day Loan – This lending model may present itself as a logical, quick and fair solution that will hold you over until your next paycheck. But, what many borrowers soon realize is that it’s nearly impossible to satisfy the payments without falling behind on other important bills. Before you know it, you’re taking out another loan to satisfy the one you had before it.  
2. Car Title Loan – Unless you don’t mind risking your ride, car title loans are bad news. The interest rates are extremely high and the loan is usually due in 30 days. Many people have forfeited their vehicles because they just couldn’t pay anymore.
3. Tax Preparer Loan – Tax preparer loans usually promise to give you the money the IRS owes you weeks in advance in exchange for a huge cut of the pie. Though regulations have cracked down on this practice some companies are getting creative by offering personal lines of credit with double digit interest rates.

Check out part two where you’ll get to see three other dead end loan types you should avoid.