A payday loan is a short term, high interest loan. Normally, you take financing for a brief period of time- typically a couple of weeks or until your next payday. You take the loan for a restricted period and then repay it. Once you write a check for the amount you have to borrow plus the fee, you will have instant access to the money. While payday loans occasionally have a poor reputation for being expensive, there are a number of clever methods to take a payday loan work for you.
Use a Payday Loan for a Need
Typically, you should be sure you take a payday advance just for something important – a need rather than a want. If you need to make car repairs or to pay your rent, a payday loan may be worth it. This especially holds true when not using the loan would wind up costing you more. For instance, $50 in late fees will cost you more than the $15 fee to take a payday loan.
Use a Reputable Payday Loan Lender
You should be certain to shop about for a payday loan lender, who will give you with the most favorable terms and conditions for your cash advance. Instead of choosing the very first lender you chance upon, try to find one, who offers a somewhat longer loan span or a somewhat lower fee structure. There are many choices of lenders out there. So do your research to find one that fits your situation.
Set Up a Repayment Schedule
Remember to come up with a real strategy to repay the payday loan. While it can make fiscal sense to pay the $15 for every $100 borrowed over a 1-2 week span, rolling over your payday loan could be a recipe for financial trouble. For instance, if you are unable to repay the $115 on the $100 when it is due, you could elect to take another payday loan to be able to settle the old one. This results in an even higher rate of interest and may produce an endless cycle that's not easy to break.
Make a commitment to yourself that if you do take a payday loan that you are going to pay repay it when it's due. Do anything it takes to do this. Maybe set up a budget or cut some of your expenses to ensure that you will repay your payday loan. In this way, you will limit the fees that you have to pay but you will get the advantage of an immediate cash advance when you need it the most.