In the midst of a worldwide economic crisis that continues to be underplayed by government, many people are still feeling the sting of unemployment and slow business. This weight seems even heavier when they realize that when they are at their worst, this is the exact moment in which most financial institutions not only turn their back, but also begin demanding payments and becoming quite disagreeable.

Nobody is immune to needing a little extra cash now and then. After all, we’ve all got bills to pay and expenses to cover. Unfortunately, most of us are limited with respect to how and when we can access that much needed cash. Bank loans are problematic, take time and one always runs the risk of being refused due to a bad credit rating. Of course one could use a credit card, but this always includes covering extremely high interest rates on cash advances. One could borrow money from friends and family, but this somewhat embarrassing and should therefore only be seen as a last resort.

Whilst most of us claim to live within our means, we also recognize that sometimes we spend more than we can afford. In some instances it’s our reliance on easy credit and our inability to recognize that what we purchase today, must ultimately be paid for tomorrow. Yet, there are other instances were we encounter an unforeseen emergency and simply need a little extra cash to get us through a difficult period.

With the recent Credit Crunch and recession, many people are now finding it difficult to get any credit. More and more financial institutions and lenders are becoming more strict with their terms of lending and who may qualify. If you unfortunately have poor credit, you are more than likely going to have a hard time getting approved from many lenders. For those with poor credit, there are still some options available if you are needing a loan. One of these options is a logbook loan.

What Are Logbook Loans?

Small loans in an economic environment such as the volatile market of today are extremely difficult to get - if you follow the more traditional path of getting a loan.

During tough economic times, it is challenging to find a lender who is willing to work with your needs. Lenders often want to see a perfect or nearly perfect credit history as well as proof of income showing that you are able to repay the loan.

While you might be able to prove that you are working, that perfect credit history is difficult to obtain and maintain. One late payment on a bill, credit card, rent or any other credited expenses can ruin the hard work of years.

A payday loan sounds like such a good idea at the time. You've got an expense you weren't expecting. It's only a week until you get your salary. Why not take out a short term payday loan?

But before you sign those papers or click the "Apply" button online, beware. What you don't know about payday loans can cause you a lot of grief.

First of all, stop and consider your financial situation. Often, the very fact that you need a payday loan suggests that you are already in some kind of financial difficulty. If the money you're bringing in doesn't cover your expenses, leaving you regularly short on mortgage, rent and utilities, a payday loan will not help in the long run. Instead, consider getting some financial counseling.

For many, short term loans can seem like a godsend when they are financially crunched. With no money to pay the bills people would rather borrow expensive, high-interest loans rather than deal with the depression that comes along with getting utilities turned off, creditors hounding them or a default on their credit history.

Payday loans are often used as a way to respond to an emergency or unexpected expense. They are not intended to change a person's payday and the terms of the loan usually last for two weeks. The borrower is expected in most cases to sign a post-dated check that covers the fees, interest, and the amount of the loan.

For many feeling the crunch of the economy, payday loans can seem like a god-send. With advertisements talking about fast cash now with low fees, payday loans seem like a great solution to a common problem. Many people wonder though that if they take out a payday loan their credit score might be adversely affected. After all, when one usually takes out a payday loan it is due to mostly dire circumstances. But is there any truth to that statement?