The payday loan industry is currently going through boom times. There are new payday lenders popping up every week, as millions of people look to get instant cash into their bank accounts.
Are you considering a payday loan? Maybe you need urgent cash to pay the bills or buy this weeks groceries?
If this is the case then it is not something you should jump into blindly. Payday loans can get extremely serious very quickly if you fail to repay them on time, which is why you need to ask yourself some questions before applying.
Do I really need this money?
The first question you should ask yourself is if you really need the money? Sure, if it is a financial emergency then a payday loan might be your only option, but when you are planning to use the funds to buy clothes or go on a vacation then you should avoid payday loans altogether.
Can I get the money elsewhere?
It’s no secret that payday loans have very high interest rates, which means you might want to consider other options. For example, you could ask family and friends for help, contact your bank, sell some high value items, or even get a second income stream.
Can I repay the money on time?
When applying for a payday loan you will be supplied with a payment deadline which is when the money is due back. If there are any doubts in your mind about whether or not you will be able to repay the money on time, then it is probably a good idea that you give payday loans a miss.
Once you miss the payment deadline then expect to be hit with extra fees and a higher interest rate. Then, if you still fail to repay what you owe, expect the lender to pass your debt onto a debt collection agency who will start turning up at your house to retrieve the money.
Have I had trouble paying off debts in the past?
If you want to predict what will happen in the future, then most times you only need to look at the past. Maybe you have taken out payday loans before and then struggled to pay them back?
In this situation, applying for a payday loan again probably isn’t the wisest choice. Instead, look at the options available to you, and start thinking about your financial situation so you don’t end up in this situation again.