Loans, in general, can be risky depending on your financial situation, but payday loans are particularly tricky because the loan needs to be paid back in a short amount of time. If you make a mistake, it can be difficult to get out, and you could wind up paying far more than the original loan, so before you commit to a payday loan, ask yourself some questions.
1. Are You Already Struggling Financially?
If you are already struggling to pay bills or pay back a previous loan, you may want to hold off on the payday loan. Payday lenders are notorious for being predatory, and if you are already struggling, the last thing you want to do is add to your debt.
2. Can You Manage Until Your Next Paycheck?
You may find luck with a payday loan if you don’t see any way out of your situation. Otherwise, if there is anything that you can do to supplement income, such as a yard sale or borrowing from family, you may want to try this first. For additional resources, you may be able to learn more information from Speedy Cash.
3. Will You Be Able to Pay the Loan Back in Time?
This is arguably the most important question, and if you are confident that you can pay the loan back in time, you are way more prepared to take the loan. Payday loans require a full repayment in a short amount of time, and if you fall behind once, you can get stuck with some high interest rates or ridiculous fees.
4. Will You Fall Behind on Other Bills?
If paying your payday loan on time means falling behind on other bills, it may not be worth it. Depending on the bills in question, this can put you in a worse financial situation than the one you started with.
5. Can You Get More Hours at Work?
By being able to get more hours at work, you might be able to justify getting a payday loan, but more importantly, you might be able to avoid it. Given the risk, it’s important to exhaust all of your options before committing to a loan of this nature.
6. Do You Really Need the Money Now?
The only reason to get a payday loan is if you really need the money, and you can’t see any other way out. It’s often a mistake to view a payday loan as a perfect solution to your current financial issue, and if mishandled, a payday loan could ultimately cost you more than what you thought.