We’ve all heard the problems with payday loans. While they’re often easy to arrange, the interest rates the lenders charge are usually as high as credit cards. And if you can’t pay the loan back on time—if you default—those rates can skyrocket. The hole you’re in will just get deeper and deeper.
But if you’re smart about what you’re doing—if you study the situation and can discipline yourself—a payday loan can be a short-term godsend.
The advantages to payday loans are straightforward:
Unlike more formal bank loans, payday loans don’t require that you have a good credit score—your credit history won’t even be checked, at least not in depth.
- They’re quick:according to learnbonds, approval happens fast, oftentimes less than 24 hours from filling out the application to depositing the loan in your checking account.
- They’re easy: unlike more formal bank loans, payday loans don’t require that you have a good credit score—your credit history won’t even be checked, at least not in depth. Click here if you want to see how easy it can be.
- They’re simple: a payday loan will just be a percentage of your monthly income, so you won’t need to put up collateral—the title to your car or your home mortgage.
But what that tells you is that you’ll need a regular paycheck and you’ll need a checking account.
The Smart Approach
What you’ll also need is a good dose of common sense. Unless you were born with a silver spoon in your mouth, you’re likely to run into money troubles at some point in your life—more than once if you’re anything like most of us. Medical bills pile up, your kids need help paying their tuition, business plans don’t work out the way you expect.
The trick to make payday loans work for you, rather than against you, is to have a clear-eyed plan:
- Pay attention to the loan’s details, especially the due date. Make paying back the loan on time your top priority.
- Adjust your lifestyle to avoid falling into a financial hole again. Cut back on your expenses, at least until you can get clear of your financial bind. Eat out less often. Put off major purchases. Take local trips for your vacations.
- Do your research to pick a reputable payday loan company. Access site like learnbonds to guide you.
- Don’t panic. Don’t ignore the issue. Don’t pretend the problem will go away on its own.
- Then, long-term, get money-management guidance, online or at a local community college. The last thing you want to do is roll from one payday loan to another to another, without ever solving the core problem that somehow you’re spending more money than you’re making.
And whatever you do, don’t feel guilty about the financial hole you’ve made for yourself—because most people around you are struggling with similar problems or have in the past.