Payday loans are loans given in advance of your paycheck that you are expecting at a later time from your employer. They are given with the trust that you will pay them back, plus interest, once you receive your paycheck. Some people have gotten into trouble with payday loans. They borrow the money today with only a checking account and a few dollars in the bank, and promise to pay it back in about 2 weeks, when they get paid. Unfortunately, that day rolls around and they don’t have enough money to pay them back. Some payday loan institutions will allow you an extension when that happens, while some will not.
Here is a list of tips you can remember when dealing with payday loan companies and hot to avoid the problems:
1) Don’t borrow unless you have to. While payday loans are a great way to “stretch through” till your next paycheck, they are only there for people who are desperate for cash for a few days. They are not meant to be your fix it all solution for your financial woes. So only borrow money when you really need it.
2) Know what you will owe ahead of time. Sometimes the amount of interest charged on payday loans is surprising to people. While most operate within the law, the amount of interest (usury) fees they charge is often higher than the normal loan. So be clear on the contract you are signing at the time, know the fees, extra expenses, and penalties for paying late.
3) Plan how to pay it back. Once you get the money, plan how you will pay it back ahead of time, before the note is due. Count it as a primary aspect of your budget that month. If you don’t, you will just end up “rolling it over” time and time again and you will never get caught up.
4) Don’t make a habit of using payday loans. Even the payday loan people will tell you that you should only use their services when times are so hard, you don’t have any choice. With the interest fees being higher than the normal loan, and the fact that it is a short-term loan, it is not worth it to continually roll over charges, pay more fees, and keep the cycle going. It’s great to have these services when you need them, but only in emergencies.
5) Pay the most important bills first. If you put priority on what is most important, you will learn to balance your budget better in the future. Living within your means is always the most important thing you can do to stay within your budget. Use payday loans to catch up temporarily, then be careful with the money and use it for the most important bills first. Don’t splurge on someone with it, or you will just end up right where you started–in more debt!
Finally, payday loans are a quick fix to temporary financial issues. But don’t use them as the norm. If you are careful with spending, live within your means on a monthly basis, and use payday loans only when it is necessary, they can be your best friend. Payday loans are there to help when you need money fast. Choose a company you can trust and know their policies. Good luck in your finances!
Joseph Francis is a professional blogger that provides information and advice on no credit check title loans and auto title loans. He writes for TitleMax, a title loans store with locations nationwide.
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