Nobody likes it when their cash on hand doesn't meet their financial obligations for the day, week or month, but it happens. While taking out a payday loan should be your absolute last resort, it is a legitimate option to make ends meet until your next paycheck. This article intends to help you navigate your way through a short-term financial crisis and avoid mistakes that could potentially make it worse.

Do you really need to take out a payday loan?
We've all seen commercials for local payday lenders that offer fast cash for bills and "other things." The weasel words "other things" are often used to lead customers to believe that payday loans could and should be used to take vacations, buy electronics or for other recreational uses. This is always a bad idea. The terms and conditions of a payday loan are the exact opposite of fun. The price of the loan and the penalties associated with repayment far outweigh any short-term satisfaction you may achieve. Unless something is an absolute necessity, save the cash you'll need and purchase the item or go on the trip when you have the money to pay for it in hand. You'll be able to enjoy the pleasures of an earned reward without the heavy burden of debt weighing on your mind.

Exhaust all other options.
Given the terms and arrangements that are standard among even the very best payday lenders, you should avoid taking out a loan of this nature if you have any other options available. Have you looked into a conventional loan or line of credit from your bank or credit union? Have you considered applying for a credit card, which have much more fair and agreeable terms and rates? Have you considered selling some of your possessions at a pawnshop or taking old clothing to a consignment store to raise the money? Have you asked friends and family to loan you the balance to cover your shortfall? If the answer to any of these questions is no, we strongly urge you to consider these options first and come up with other creative ways to raise the money before you sign up for a loan from a payday lender.

Do not take out a loan you cannot pay back.
This may seem like a no brainer. However, you would be shocked to learn how many people knowingly take out short-term, high-interest loans they cannot pay back in the loan's original time limit. The number of lenders that will knowingly loan money to people who cannot pay it back is even more shocking. This happens for three reasons; chief among them is desperation, followed by ignorance and ending with lenders that take advantage of people who are in a financial pinch. If you take out a loan you cannot pay back, it will only make your financial problems far worse in a very short amount of time.

Pay back your payday loan in its original term.
By this, we mean that as soon as you have the cash, you should pay back the full balance of the loan immediately. This is one bill you should never procrastinate paying. Once a payday loan expires, its original interest rate generally goes up from an APR of several hundred percentages into the thousands. If you roll it over more than once, you will end up paying the principal amount several times over before you're out of the woods in your payday loan. By this time, unless your financial situation has dramatically improved, that quick-fix loan will have put you behind on many other bills that you would have otherwise been able to pay.

Summary
Simply put, payday loans are a viable option only in extreme conditions of true necessity. Furthermore, only those who can repay these loans within the original term should take them. Finally, payday loans should never, ever become a long-term commitment.

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