How to avoid Payday Loans
Individuals form both good and bad habits at a young age. If you want to be a responsible person, you must start doing the right things from the very beginning, or at least right now. Handling money is a critical task because if you make it a habit to spend more than you earn, it is very bad and can lead to problems in the future. Payday loans are not a good option because they are regarded as one of the risky solutions available to over-spenders.
Payday loans can be a good solution for those who are in desperate need of money due to an emergency. However, if you apply for payday loans without considering the risks, you may find yourself in a debt trap that will only worsen your current situation.
Say for instance you have an invoice that you absolutely need to pay in the next week, but you also know your salary isn’t landing on your account until the week after. This is where a payday loan do fill a vital function.
However, one needs to be fully aware of the drawbacks to applying for payday loans. One obvious reason is the high cost. Annual interest can range from 400 to 800 percent. The argument could be made that at that cost, it’s a very last resort. That’s why keeping on top of your finances is your most important job. Well, perhaps after raising a child or keeping your health, but they are more interlinked than one might think.
You will frequently have to borrow as a result of poor financial planning. It is recommended that you create a realistic monthly budget at the beginning of the month so that you can already balance your earnings and expenses. Make no unnecessary purchases. Make sure to set aside a portion of your salary for savings so that you will have money to spend if something unexpected happens. There are counseling offices that can assist you in creating monthly budgets.
Let’s assume you borrowed money and now you have a creditor. Some people will likely borrow from someone else or apply for payday loans in order to pay their creditors. This is not good, and you should speak with your creditors and ask them if they can wait until your next paycheck. If you follow this advice, you can save a lot of money on interest.
Credit cards can be used to make urgent payments. Credit card interest rates are much lower than payday loan interest rates. If you belong to a credit union, you can borrow money because the interest rate is lower. If you have the courage to approach your boss, you can request a cash advance, especially if you are in a medical emergency. If you speak to your boss in a pleasant manner, he will undoubtedly understand your situation.
If you can’t resist the urge to borrow, don’t take out a payday loan just yet. Ask your friends or relatives if they can lend you money and promise to repay them in two weeks or even a month. This will only work if you have no bad credit history or if you have paid all of your previous debts to them.
There are also community social services that provide the needy with immediate financial assistance. You can inquire as to whether you are eligible for such assistance.
So there you have it; you just need to be aware of your other options before applying for a payday loan. Payday loans have some advantages, but the disadvantages are obvious, so avoid them if possible. Just apply for it after you’ve exhausted all other possibilities.