If you are absolutely strapped for cash and need to pay for something immediately, taking out a cash advance or payday loan can be a viable option. However, because these loans have high interest rates and the penalties for failed payment can be steep, there are a few steps you should always take before signing on for such a loan.

Step 1: Consider other means of payment.

Spend a little time considering whether there might be another type of loan you can take out for less. Perhaps one of your friends is willing to lend you money for $10 or $20 interest -- or in exchange for lunch. Maybe you can put the expense on your credit card and pay it off before the end of the month, resulting in an interest cost of $0. If you've exhausted your other options, then a cash advance, even though the interest can be a bit costly, is probably right for you.

Step 2: Make sure you can pay it back.

Cash advances are not too expensive if you actually pay on time. When they really start costing you is if you ignore the original contract and make a late payment. So, when you are visiting with the lender, make sure you ask for the exact date that payment on the loan is due. Ensure you'll have the money in your checking account by this date so that you don't end up being charged extra fees. You really can't blame the loan company if they charge you fees for late payment -- you should have known what the fees were when you signed up!

Step 3: Make sure your checking information is correct.

Usually, the lender for a payday loan or cash advance will deduct the money straight out of your checking account after the loan comes due. If they try to do this and find out they have the wrong checking account information, the payment will fail and you'll probably be assessed a fee. So, before you leave the lender's facility, double check that the routing number and checking account number that you gave them is correct. Some lenders may run a trial deposit and withdrawal to confirm an account. This is a good safety precaution for both you and the lender.

Follow the steps above before you take out a cash advance loan, and you'll be able to avoid overpaying and facing harsh fines. Contact a service, like Cash Depot Inc., for more help.