Do you need some emergency funds? Payday loans are quite common, but are they the best option for you? There are certain situations you can find yourself in (i.e, credit problems and a pressing need for cash) that make these kinds of loans a viable option. Read this article so you can educate yourself and make a better decision about taking out a payday loan.
If you are considering a payday loan, then you need to be sure that you have the means to repay it on time. Payday loans have really high interest rates, so make sure you pay them back on time.
Only commit to one payday loan at a time for the best results. Choose one payday lender and stick only with that company to avoid getting into a financial quagmire. You’ll end up not being able to pay back all of the money, regardless of what your salary might be.
If you take out a payday loan, make sure that you can afford to pay it back within one to two weeks. Payday loans should be used only in emergencies, when you truly have no other alternatives. When you take out a payday loan, and cannot pay it back right away, two things happen. First, you have to pay a fee to keep re-extending your loan until you can pay it off. Second, you keep getting charged more and more interest.
If you must get a payday loan, open a new checking account at a bank you don’t normally use. Ask the bank for temporary checks, and use this account to get your payday loan. When your loan comes due, deposit the amount, you need to pay off the loan into your new bank account. This protects your regular income in case you can’t pay the loan back on time.
Choose your references wisely. Some payday loan companies require you to name two, or three references. These are the people that they will call, if there is a problem and you cannot be reached. Make sure your references can be reached. Moreover, make sure that you alert your references, that you are using them. This will help them to expect any calls.
Only take out a payday loan, if you have no other options. Payday loan providers generally charge borrowers extortionate interest rates, and administration fees. Therefore, you should explore other methods of acquiring quick cash before, resorting to a payday loan. You could, for example, borrow some money from friends, or family.
Do not allow a lender to talk you into using a new loan to pay off the balance of your previous debt. You will get stuck paying the fees on not just the first loan, but the second as well. They can quickly talk you into doing this time and time again until you pay them more than five times what you had initially borrowed in just fees.
Hopefully, you now know a little more about payday loans. Be cautious about giving out your confidential information to payday loan companies until you have thoroughly researched them. Use what you’ve learned here to make a wise financial decision.