Payday loans get a lot of bad press but there are some people that successfully use a payday loan to get by. Although any sort of borrowing is not usually recommended and payday loans can be an expensive way to do so, it is something which some people have no choice but to do and below are some examples of when it may be necessary and how to make sure that you do it wisely.
It is always a good idea to borrow money using the cheapest method that you can. In many cases this could be a credit card or personal loan. However, if you have a bad credit rating, it may not be possible to have access to either of these types of borrowing. You may have an overdraft but this will be expensive and if it is unauthorised then the cost could be higher than a payday loan, o it is worth checking.
When deciding whether to borrow, you need to make sure that you cannot manage without the money. Borrowing is very expensive and if you can wait until you earn some money or just go without paying for whatever you need the money for, then this is the best thing to do. However, there will be situations where you need the money for an emergency and there is no other option but to borrow. If you cannot borrow from a cheap source, then a payday loan is the answer.
Payday loans were set up to help people in this sort of situation and this is why they do not do a credit check. They will therefore lend to anyone, which is risky for them and this is why they charge so much money to borrowers. However, if you are careful, you can avoid overpaying for a payday loan. It is only if you do not pay the loan back on time that the charges can start to add up. You will be charged fees and these can add up daily. This means that you need to be really organised. The repayments will be due when you get your next payday. You will need to make sure that when you do get paid, that you have enough money to pay back the loan. You should know exactly how much is owed (for the loan, interest and fees) as the lender should tell you and therefore you will need to make sure that you will have enough money to pay this. Make sure that you do not spend the money on anything else before the repayment is due and that if you give them an account number to take the money from, that the money will be in there. If they try to take the payment and there is not enough money to pay it then the fees will start to be charged. It is therefore important not only to be careful to make sure the money is there, but not to borrow more than you can afford to repay.