Most people don't really plan for an emergency fund when they need money urgently; a payday loan will be one of the common resources to get quick money to resolve their financial needs. But, survey results show that more than 60% of people who take up a payday loan failed to clear it on due date. If you are one of the statistics, then you might be at risk of trapping into a debt problem when the unpaid payday loan becomes a debt that keeps snowballing with interest. There is nothing wrong to borrow the money to handle your financial hardship, however you need to use it in a right way so that you can avoid yourself from the risk of trapping into a debt problem.
Many people know how important to keep their bills paid on time each month so that they will keep their credit in good standing. However, when something like major illness happen or they get laid off and become jobless but yet to get a new job, they may not be able to pay their bills on time if they do not have emergency fund in their account, which may cause bad impacts on their credit score due to late payments. Then, getting a payday loan to pay the basic bills like utilities may be a good option to keep their credit in good standing.
Payday loans are usually simple and easy to apply because it just need you to meet some simple requirements such as a checking account or a good job. However, it carries the highest interest rate among the loans if you compare it APR with others. Therefore, once you get a payday loan, you should put in plan on how to get rid of it as soon as possible or before the due date. Don't renew it if you do not have to because it will cost you money.
Is getting a payday loan really a must? You should ask this question before you go and apply it. Always make sure that the reason you are getting it is important one and there is no other better option such as getting helps from your friends or families. If getting the loan is your real need, then what is your plan to pay it off? Most people who trapped into debt were due to no plan to put in place to pay back the money they had borrowed. So, once you have decided to go and apply for a payday loan, you should always think of how to pay it off as soon as possible, avoid renewing it or getting other payday loan to pay for existing one.
If there is a need, you may need to find a second source of income or temporary job to increase your income so that you have the money to pay back the money you have borrowed. The bottom line is, once you get the loan to resolve the immediate financial needs, you will need money to pay it off in your next payday, where will you get the money? Getting a part-time job, performing garage sale, pleading valuable items are a few way to cash out some money to pay off the loan.
SummaryPayday loan is commonly used by people to get instant money to handle their immediate financial needs. Don't let it becomes a debt burden, always think of how to get rid of it as soon as possible if you have used the loan to resolve an emergency need.