When used carefully, a payday loan can be the perfect short-term solution to all types of financial problems. Unexpected car repairs, overdue monthly bills, debt payments and groceries are just a few examples of expenses that can be covered quickly with payday loans. While lenders used to run brick-and-mortar businesses in the past, most have since taken their services online. Now that digital storefronts are becoming increasingly common, getting an advance is easier and more tempting than ever before. You no longer need to leave your home to find a lender in your area with business hours that fit your schedule. With a few clicks of your mouse, you can secure a loan from Northcash and have it deposited into your bank account overnight. All you need is proof of income and a working checking account.
The downside is that payday advances still come with high interest rates, and you can find yourself in serious financial trouble if you start to rely on them to pay off most of your household expenses. Following the five tips below can help you learn how to use payday loans efficiently and avoid getting caught in the dreaded borrowing cycle.
1. Don’t use a payday loan to cover any expenses that can wait until your next paycheck
Since advances carry high interest rates, using them to pay off late bills doesn’t always mean that you’ll be saving money in the long run. For example, paying for late fees can be cheaper than paying interest on a payday loan. If you’re specifically worried about overdue monthly bills, call to find out what late fees you’ll be charged and whether they can be forgiven if you pay off the balance relatively close to the deadline date.
2. Research borrowing rules and interest rates
Because taking out a payday loan on your computer only takes a few minutes, it’s easy to get lazy about reading the small print. To assess whether taking an advance really makes sense in your situation, you need to know exactly how much money you can expect to spend on the entire process after it’s done.
3. Have a plan for repaying your advance by its due date
There’s absolutely nothing dangerous about taking out payday advances if you already know that you can repay them on time. When you’re confronted with an expense that needs to be taken care of immediately, there’s sometimes a tendency not to think about the future. In fact, being pressured to make a payment now is one of the top reasons why people have bad experiences with using payday loans. To use an advance safely, you need to have a plan for how you’re going to repay the money you’ll owe before you even think about applying.
4. Use secure websites with a good reputation
Legitimate lenders have transparent backgrounds, testimonials from real people and active social media pages. They’re also upfront about their terms of service. If you come across any businesses that ask you to wire money before the process is over, it’s a sure sign that you’re dealing with a scammer. In general, always avoid deals that sound too good to be true.
5. Stick to one lender
Borrowing money from multiple lenders is how people get trapped in the cycle of renewing loans and taking out one advance to pay off another while their interest rates continue to grow. Unfortunately, most borrowers who juggle loans from multiple lenders don’t realize how much they owe until it’s too late. While renewing your loan once or twice won’t bankrupt you, going to the same lender can help you stay in control.
Nam is a finance expert writer who has a particular interest in covering topics on loans. He’s a regular contributor on PaydayLoansGuide.org.Read More