If you are going to take out a payday loan is is important to realize how to use them responsibly. Follow these guidelines before considering taking out a loan and you will avoid financial troubles down the road.
Calculate full costs of the loan
You do not get something for nothing. Bear in mind that there is a 10% to 25% interest rate on most payday loans. Add up the full cost of the loan with interest and budget that amount into your next paycheck. If you will not be able to pay that amount in the next one or two weeks or pay period it would be best to avoid it or take out a smaller amount. In other words never take out more than you can pay back.
To make up funds from a short paycheck
If for any reason you have lost work that you cannot recover and end up with a slimmer paycheck right when you were counting on your normal amount, this might be the best situation to use a payday loan. The reason being is because you can easily only take out the amount missing from your paycheck, which should be a fraction of your next paycheck. That should make it easy enough to pay it off in the future.
Use a payday loan as a last result
First of all, be sure to only use a payday loan for emergency purposes. It would not be wise to use the loan to pay for products you would be better off saving up for like a tablet, pc, or television. Consider the nature of the emergency. Will you be able to get by without one? If you have any money set aside use it before considering your loan. These are all things to think about when deciding if you really need that loan.
Ask only for what you really need
It is tempting to ask for the maximum amount that you can take out. Even though you can doesn’t mean you should. Think about what your paycheck is each pay period, deduct the interest rate, and shoot for that amount or lower.
Go through your credit card with a cash advance
If you have a credit card cash advance is an option for you. It will give you the option to take cash out of an ATM using your credit card without having to go through the application process that you do with a normal payday loan. This will allow you to avoid possibly harsher interest rates you may rack up on your credit card, or if you are close to your limit on the credit card and do not want to reach it.