Payday loans are small loans to be paid back very quickly at high rates. They can be life savers to get someone through a difficult time, or they can be the crushing rocks throwing burying you in grave of debt. It is important to know how payday loans work and use them most effectively so you can make the most and not get stuck under debt they can cause. The following dos and don’ts will help you stay informed and help you stay ahead of the loan.
Don’t get a payday loan. That seems counter intuitive for this article, but the first tip is do not get a payday loan without comparing all your options. Payday loans are almost like legal loan sharking, and serve considerable temptation as a short burst of income. However the high interest and short nature of these loans make them god sends for those in dire need but if you are just having a hard time tough it out, only get a payday loan if you absolutely have to. Payday loans are not for that new TV on sale, or a special price on something you plan to get. Payday loans are not like regular loans and will take some by surprise so if you have any other options take them first leave the payday loans for absolute emergencies.
Budget your loan. Once you have decided that you really do need a loan you need to budget it very carefully. This is subjective as some people can just budget better than others but it is very important to make sure you spend this money only in the places it needs to go. Compare payday loans using a comparison site, it will help find the best one to suit you. Even more important is the budget to make sure you have enough to pay back the loan when it comes do. Payday loan fees and penalties are very high and can increase the amount you owe by 300% that’s 4X the original amount! So budget that money, make sure you have enough for the payments and that the loan money goes to where it needs to so you don’t have to take out more later on.
Don’t just go to the first place you see. Each payday loan place is different; there are more of these places than McDonalds out there. They all offer different rates and plans for your loan so do a little shopping around. You want to get the best plan that fits you and the lowest rates possible. A little bit of research and shopping around goes a long way to get a the payment plan, timeline, and rates you want. You want to use every advantage you have to get the right loan and this is easy to do with so many options.
Do make sure you pay on time. As stated before the fees and penalties of payday loans are monstrous, and can push the already high interest rates even higher. You want to make sure you’ve planned and budgeted out to make the payments back in the proper amounts and time; this will let you get through the hard time quickly. Payday loans are meant for short term and should be paid back as quickly as possible, the longer you drag one out the more you will end up owing in the end plus and fees or penalties.
Following these tips you should be able to get through whatever hard time drove you to payday loans with a little more ease. As times get hard more and more turn to short term lending and avoid big banks. Just remember the short term lenders are no better and want to make money just like the banks. By remembering these tips you can avoid paying more than needed. A final tip remember you will be short when you pay back the loan too, you don’t want to get caught in a cycle of paying back only to need another payday loan again each pay check.