Avoiding the Temptation of Payday Loans – Payday loan companies always advertise their easy approval and really quick cash service.
This is something every borrower can attest to – even to a point where they are drawn to rely on payday loans even for their unnecessary wants. The worst thing about it is that though there never really was a lack of information drive against payday lenders, people still look for ways to get a loan. They are basically setting their own financial trap.
Here are some things to do and think about to avoid being tempted of getting a payday loan.
#1. The Law
Since payday borrowers don’t offer any form of collateral, payday lenders can afford to be very aggressive with payment collection. They will also be forcing you into issuing a post-dated check.
If you happen to lack funds on the day the check is due, they can file a case against you, and the bank will charge you for the bounced check as well. Some states allow lenders to file lawsuits against you, so if you don’t want one – it might be best to avoid payday loan companies.
#2. Savings can Save You
People usually turn to payday loans because they ran short of money before their next paycheck comes. Before being in such situations, build your savings and make it an emergency fund.
It doesn’t necessarily mean that you have to set aside hundreds every time. If you set aside a small amount every paycheck, you’ll be surprised to have a sufficient emergency fund within months.
#3. Consider Credit Cards
Credit Cards itself comes with high interest rates. But compared to what payday lenders offer, credit cards are better deals. Credit cards usually range from 6% to 12%. But payday loans companies’ goes up to at least 300% and up.
What’s even better is that with credit cards, late payments won’t get you in trouble legally. Credit Companies are more willing to work with you on alternative repayment plans to help you pay what you owe.
#4. Your Boss Your Friend
If you really fall short on your budget, don’t make payday lenders your first option. You can always talk to your boss about your financial struggle and ask for a cash advance of your paycheck is a better choice.
If you’ve been a good employee, or have not been getting regular Cash Advances, you get a better chance. There will be no interests, or if charged, will be surely lower.
#5. Always Seek Advice
People go bankrupt because they are not prepared to run out of money. Before ever losing all your money with loans, seek help from a financial advisor. You can also read articles to be more knowledgeable about the possibilities and get some tips.
The temptation of getting quick cash without many requirements will always be around, but it doesn’t really mean you have to take one. As much as possible, avoid being in a situation where you will need to take out a loan and save yourself from bankruptcy.