Scam Alert: Payday Loans
Payday loans can be a handy way to get some short term money without resorting to asking friends and family. That said, the user fees, interest and other associated costs can leave you exposed to scams and overpayment.
Prior to seeking out a payday or short term loan, you need to think about whether a payday loan is right for your particular situation.
Don’t Become Reliant on Payday Loans Long-Term
Payday loans are designed to only be used once in a while, not every month. If you’re finding yourself using a payday loan service month after month, it might time to look into getting some debt counselling. Services are available in most US states and Canadian provinces to assist you in developing a plan to get out of a short-term borrowing cycle. (Special thanks to Payday Loans Canada for the Canadian markets tip)
Make Sure You Read the Fine Print
Take the time to fully consume the contents of your loan agreement. Don’t rush into it: if you feel you’re not sure yet, or have hesitation about any clauses, put those questions to the lender immediately. Keep a record of anything you sign, and hang onto it for a couple of years at least.
Make sure you understand when your repayment is required and ensure you have the money in your bank account to cover it. Fees for overdraft and other bank charges can really take a bite out of your short term income if you’re not careful. If for some reason you can’t repay your loan, be sure to get in touch with your lender ASAP and work out alternative payment arrangements.
Consider Other Credit Instruments
Payday loans might not be the best tool for you to use. Again, if you’re going back for a payday loan again and again, you might be shooting yourself in the foot. Look for other options available to you like prepaid Visa cards or other debit tools that don’t put you in the hole constantly. You may also want to talk to your employer about doing some overtime or finding some other means to generate some short term cash.
The bottom line here is that the longer you put off dealing with your debt load, the more exposed to interest charges and fees you’ll be from short term funding providers. Be smart and know your options!
