New restrictions are in place for the payday loan industry. A bill in Ohio was recently passed that will put new limits on payday loans. The law, which is effective September 1, 2008, would limit the allowable annual interest rate on payday loans in Ohio to 28%. This is a pretty low rate if you are familiar with payday loans and their outrageous APRs.

Payday lending offices usually charge about $15 for every $100 borrowed on a two-week loan, which comes out to an annual interest rate of 391%. The bill also means a borrower is only allowed four payday loans per year, with a maximum loan amount of $500, much less than the current limit of $5000. Obviously this bill would put a nice dent in the payday loan industry in Ohio.

This bill may be overall good for Ohio citizens from a financial point of view. Yes, it may take away a credit option for those in need, but payday loans contribute to poor management of personal funds because people continue to take out new loans to pay off old loans and borrowers find themselves caught in the payday loan trap.

While a borrower should have no more than one or two payday loans (if any) at the same time, sometimes the payday loan trap gets us into binds like this. It may be very difficult to pay off multiple payday loans at the same time. If this is the case with you, you may want to consider consolidating your payday loans. By consolidating payday loans you will save drastically on fees and it combines all of your advances into a single more manageable loan. This is sort of similar to consolidating your credit cards as it helps (for the most part) borrowers pay off their debt easier.

It is highly advised against getting more than one or two payday loans at the same time. Those who are already have done this to themselves and it is too late, as they have found themselves caught in the payday loan trap, should consider consolidating payday loans to make things more manageable, and if more loans are needed in the future, borrowers should consider other options besides payday loans.

Making that wallet filled with cash from payday to payday can be one of the hardest things for many people. Here are some practical tips on how to budget your money and make it last until the next pay day.

In order to provide a solution, the problem should be identified first. The first step in budgeting would be the identification of your present spending habits and patterns. This will consist of the common or regular things you buy, reason of purchase, total amount spent for each item bought and frequency of every purchase. This can be done by taking note of the purchase and completing the list every end of the day.

After you have recorded your prevailing spending habit for a week, the next thing to do is to evaluate it. You can talk to yourself as if you are another person criticizing and analyzing your spending habit record. This may be quite weird but this will effectively make you realize what can be done to improve your spending behavior. You are also encouraged to ask other people whom you trust to help you assess your record. This can be your spouse, parents, relatives, or close friends.

Now that you recognize what needs improvement and change, you have to work on a plan and set goals. One of the serious mistakes of other is that they structure their goal or plans in a negative tone, making it so hard to follow. Be optimistic! Always emphasize the benefit of your plans and goals so you can focus on the positive side rather than thinking of the sacrifices.

Action speaks louder than plans. It is true. Execute your plan and stick to it whatever happens. It may be painful while you are beginning but believe me, the results would be worthy of all the sacrifices you have made.

While some people just need to borrow money for a couple days, there are other more long term loans available to borrowers. Some payday loan companies have monthly payday loans (or, short term loans). Short term loans are convenient for the average borrower (than the typical payday loan) because they are a less of a hassle to deal with and less stressful on finances. Monthly payday loans give you a whole month to work your budget and figure out ways to pay off debts and bills.

People who get income on a monthly basis are a better fit for these types of loans. Traditional payday lenders who only loan until the next payday can usually work with the borrower by providing a monthly payday loan, though in some cases they may charge an additional fee. Short term loans may provide you (the borrower) more of a temporary longer term solution, rather than the "getting by until the next day" (or payday) mindset. This will give you time to recover from your financial mistakes or emergencies and allow you to better balance your budget over the course of the loan.

Payday Loan harassment

There are many ways that payday lenders harass borrowers who don't pay up. Some methods are legit and legal, while other are borderline to being considered harassment.

Some of these methods payday loan lenders try and collect from their borrowers include:

• Calling you at work
• Calling you at unusual times of the day
• Calling your friends and family
• Sending your account to a Collection Agency
• Letters in the mail
• Adding high fees and interest to your account

While the lender must make an attempt to collect dues, there are limits on what the payday lender can do and what is considered harassment. If you believe a Payday Lender is harassing you contact your states Attorney Generals Office, which is usually in charge of consumer protection. You can also contact the BBB (Better Business Bureau) as well.