The Do’s and Don’ts of Payday Loans
23.10.2020 WELLNESS 0.0 0

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A payday loan can help you cover an unexpected expense when you are short of cash. However, just like any other loan, there are some factors you need to take into account when applying for a payday loan. Also, you need to be careful since these are loans that need to be paid back within a short period. Consider the following do’s and don’ts when applying for a payday loan. 

Do Check All the Terms

When applying for a loan, most people tend to concentrate on the interest rate only. This is a huge mistake because the terms of the loan extend beyond the interest rates. You need to take into account other issues such as fees and repayment period and other terms. If you decide to pay the loan early, will there be any fees? What about late payment? Read the fine print to ensure you are aware of all the terms and conditions. 

Do Compare

To find a good deal, you have to compare quotes from several reputable lenders. Don’t settle with the first lender that comes to mind. For easy comparison, you can consider making use of platforms such as New Horizons that allow you to make online applications and get payday loans quotes fast. New Horizons is an authorised credit broker. You can request a quote with no fees and get an instant decision. 

Don’t Give False Information

Don’t be tempted to lie in order to get fast approval or approval for a huge amount. Reputable lenders barely give loans blindly. They take their time to check if the details you have provided are true. If you give any false information, the loan can be denied and worse still, you could be blacklisted from using the services again. Therefore, always give the correct information. You don’t have to lie since there are numerous lenders and thus it won’t be so hard to find one whose terms meet your qualifications. 

Do Check the Lender’s Credibility and Reputation

As the borrower, it’s your responsibility to take time and know your lender. How long have they been in business? Are they operating legally? Do their terms meet the payday rules and guidelines in your state or country? These are some of the things you should check before you take any deal. 

Don’t Borrow More or Less than You Need

Consider having a plan on how you intend to spend the money. Make an estimate of your current need to avoid borrowing more or less than you require. Remember it’s a loan and you will have to pay it back with interest. Thus, borrowing more than you need is not a good idea. On the other hand, if you borrow less, it will not be enough to meet the intended need. Therefore, you may end up not going on with your initial plan or stressing out about where to get more money. 

Don’t Borrow Unless You Really Need the Money

Before you take out a payday loan, always ask yourself, can this project or purchase wait? In short, consider taking the loan when you have an emergency. As stated earlier, you will have to pay the money with interest within a short period of time. Hence, consider taking the money only when you have a good use for it that can’t wait.  

Don’t Borrow If You Are Not Capable of Paying Back 

Another thing you should do before applying for a loan is make a payment plan. How will you raise the money to pay back the loan? If you don’t have a solid payment plan, avoid borrowing. Interest rates can double or triple when you don’t pay the money back on time. Therefore, make sure you have a plan and stick to it. 

Don’t Get a New Loan Before You Pay the Older One Back

If you keep borrowing and making less payment efforts, you can easily find yourself in huge debt that can be costly to get out of. So, always work hard on paying what you owe before you can borrow again. You can consider simple adjustments to your monthly expenditure or working more than one job or for a few more hours to pay off your debts fast. 

Do Check Reviews

Thanks to technology, you can easily find reviews about a lender online before engaging them further. These could be customer reviews written by people who have used the lender’s service before, or expert reviews from people you can trust. Reviews can tell you a lot about the lender’s standing. 

Finally, do seek financial help if you are struggling to manage your money. You can read reputable blogs for insight, talk to a mentor or hire a financial advisor. It’s better to take the big step and ask for help than live in a cycle of financial crisis. 

 

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TAGS:payday loan, well-being, personal finance, financial wellness

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