Pay day advances have become very popular in recent years. Sometimes a financial emergency rears its ugly head. At times like those, when you need to put your hands on some money fast and there is no other way to get the cash you need, a payday loan might almost seem like a blessing.
But if you don’t watch out what might look like a blessing can turn around and bite you.
That’s because some people run into some serious problems with payday loans by overusing them.
Luckily there are ways to protect yourself against letting that happening to you.
How to Protect Yourself from Overusing Payday Loans
Most people recognize the both the value as well as the challenges that come along with using a payday loan service. They realize that just as some people use their credit cards excessively to the point where they installment loans for bad credit become both addictive and destructive, using payday loans over and over again can also lead to undesirable results.
Most people look at cash advances as a way to help them deal with some kind of short term financial emergency. After all, that is what they were designed to do.
However some people use these loans the same way they would use their credit cards. Because they enjoy being able to spend money and can use the cash to impress their friends, some people end up using pay day cash advances for non-essential things.
In itself that’s not really bad, although it does mean that you have to pay between $10 and $30 extra for every $100 you borrow.
The big problem arises if you can’t repay the entire amount of the loan from your next paycheck.
Or, if you pay the cash advance back out of your next paycheck but still need money before your next payday, then you’ll have to take out a new payday loan in order to get that money.
If this happens you may soon find out that you are heading toward a major financial disaster.
The Best Way to Use Pay Day Loans
In order to protect yourself, if you decide to get a payday loan you have to understand and really know deep down inside that the loan is not an extension of your salary.
The next time you want to get a cash advance and use it for entertainment or any other non-essential expense you should really consider giving it an awful lot of thought before you borrow the money.
If you do get a payday loan then you should make a commitment to yourself to repay it all with your next paycheck.
How to Get the Lowest Rates
Before you even apply for a loan, spend some time checking to find the best deal – the one with the lowest interest rate.
If you need to borrow $1,000 and one loan company charges 10% interest while another charges 30% interest, when it’s time to repay the loan you’ll have to pay back $1,100 to the first company as opposed to $1,300 to the other payday loan company.
That’s $200 more that you wouldn’t have to pay if you do some research. That’s $200 that you can still have in your pocket if you decide to take the time to do a little bit of research on the Internet.