It’s a Friday afternoon, and Ronald Salvador is rushing from work to pay off his loan.

And then he’s taking out another one.

“I’m getting another one on the 24th when my paycheck is coming up,” he said. “I don’t loan everyday, because I don’t have the expenses to pay it back.”

Salvador, a Bowling Green resident, receives payday loans – a lending option that some say will become more popular in the coming months as the holiday season approaches, and of which experts say borrowers should beware.

Payday loans are short-term loans, based on a borrowers’ personal check that is written to the payday lender. Consumers write a check for the amount they need plus interest, the lender gives them cash and then holds the check for two weeks before cashing it.

“I think the general answer is, anytime we see folks with a larger need for financial help,” there is an increase in payday lending, said Jamie Fulmer, spokesperson for Advance America, which operates two branches in Bowling Green. An informal survey showed about seven payday lenders in Bowling Green.

To qualify for a payday loan, a person must have only a bank account and steady income.

“As you get into the holiday season, people have more of a need for financial assistance,” Fulmer said.

Tina Simpson, assistant manager of Fast Payday Loans in Bowling Green, said her business picks up 30 to 40 customers during the holiday season.

“It starts to pick up because of the holidays,” she said. “It’s ongoing.”

But, as the holidays roll around and people search for extra money, they need to be careful when considering the payday loan route, said Kevin Mays, a certified public accountant with Holland CPAs.

“In most all cases, I would not advise someone to go that route,” he said. “On the surface, (the interest) appears relatively minor or fairly doable. But you’re really paying an extraordinary high annual rate.”

Payday lenders in Kentucky cannot charge more than $15 in fees for every $100 borrowed – but that averages to an annual interest rate of about 300 to 400 percent, as opposed to annual credit card rates that are generally around 15 percent to 20 percent, Mays said.

“A person goes in with the intention to get a loan until he gets paid next,” Mays said. “Then they have to do it again and again … It gets so bad that you get trapped. You’ll never be able to pay that off.”

Richard Cantrell, professor emeritus of economics at Western Kentucky University, also said payday loans cost more than a few extra dollars.

“When people only have a loan for two weeks, on a yearly basis that’s multiple times that (two-week fee) in interest rate charges,” he said.

The Federal Trade Commission recently released a consumer alert, warning against payday loans, which it said “come at a very high price.”

A bill introduced in the state legislature this year would have reduced the maximum interest rate fee to $13 per every $100 borrowed, but the House later passed an amendment to keep the current interest rate of $15.

House Bill 500 would also prohibit payday loan officers from lending money to a borrower if the borrower has received a loan from any other payday lending office within 24 hours. House voters passed the bill in March; it now awaits Senate approval.

“This has been a big problem with what has happened in our economy,” Mays said. “People have spent beyond their means and defaulted to loans.”

While many think payday lending is their only option, there are other avenues borrowers can take to get loans – even during a national financial crisis that has tightened credit requirements.

First, Mays said, borrowers should consider getting a bank loan – most Bowling Green banks are still lending, Mays said.

“People’s fears (about the economy) are driving this, and people are making irrational decisions,” Mays said. “A lot of the banks I have spoken with have money to lend. A lot of this has been frenzy-driven and blown out of proportion.”

Potential borrowers might also consider selling assets, and while Mays said he does not want to advocate credit card borrowing, drawing on one’s credit card is a lot less expensive than getting a payday loan.

Cantrell put it a different – and much more blunt – way.

“People can either receive a higher income or cut on their spending,” Cantrell said. “And that’s just the story … You just have to get control of your finance situation.”

Payday lenders, of course, defend their position; Simpson said they’re serving a need, to help consumers have nearly instant access to needed money.

“For everybody, it’s a personal choice,” she said. “We have people that make $2,000 a week … and a person that can come in here because he spends and spends and spends until he can’t afford his bills.”

Fulmer agreed, and pointed to free-market principles.

“We think consumers are better served in the marketplace when they’re given more options,” he said. “Many consumers choose our product because it can be less expensive for them.”

Many borrowers who apply for payday loans need money until they can feed their empty bank accounts, he said – and paying interest on a payday loan is less expensive than paying fees for a bounced check.

“One bounced check would cost me $57,” he said, “compared to taking out a payday loan.”

But while Mays concedes that it may be a better deal than a bounced check, he said it’s the repetition of payday lending that makes it an unattractive option.

“The problem that all too often occurs is a person who borrows, they repeat it,” he said. “They do it again and again.”

If a borrower cannot repay a loan in two weeks but can explain the circumstances, some lenders will likely let them pay off the loan in increments. But, if a borrower does not contact his lender and fails to pay after two weeks, the lender will deposit the borrower’s pre-written check, Fulmer said – even if the funds aren’t available.

“It’s a problem when you don’t have money in the bank and they deposit it,” Salvador said. “It’s too high, but it doesn’t matter. As long as I can get a loan.”