There is no doubt that payday loans are very popular on the market. The industry as a whole is growing rapidly and the demand for good and affordable payday loans continues to rise. Not everyone has the ability to maintain a healthy cash flow. In fact, over 60% of the population live from pay check to pay check. The smallest disruption – an unexpected expense or an emergency – can throw their personal finance off balance completely.
Payday loans are designed to help those with gaps in their monthly budget, which is why the financing option is incredibly useful when you are in a pinch. You can apply for a payday loan and get the money you need quickly. You also don’t have to worry about complex application and review process, because the loan is simple to use.
Just because there are more payday loans to use – and that applying for one is as easy as it gets – doesn’t mean you should use the financing option for everything. Responsible use of payday loans is how you benefit more from this type of loan.
Is it necessary?
Before you jump to choosing a payday loan as a solution to your financial emergency, it is important to know that you really need one. Rather than using the loan casually, you want to approach payday loans as an option you only use when you have to.
Review the expense you have to cover or the emergency you are dealing with and see if you can raise the money you need from other sources. Sometimes, you can cut expenses and make changes to your spending habit to save quickly. Other times, you can turn to friends or relatives for help.
Payday loans will still be there as options to consider when you are done with the review. Considering that you can get the loan approved in a couple of hours, taking extra steps to approach the loan responsibly is well worth it.
How much do you need?
Aside from making sure that you really need to take out a payday loan, you can be more responsible with the use of this loan by borrowing only the amount you need. Once again, you have to review the particular situation you are in to determine the right amount to borrow.
If you do try to borrow from friends or relatives, you can also consider borrowing smaller amounts to reduce the amount of payday loan you need to take out. £20 help from a few friends could reduce your £500 payday loan to £300 rather easily.
There is a big advantage to gain from borrowing less: you pay less on interest and other charges as well. The cost of the loan is considerably smaller when you borrow less, giving you the ability to save and still solve your financial emergency in the process.
Can you repay the loan?
Borrowing from a payday lender is easy. You can borrow up to £1,000 – or bigger with some lenders – and get the money you need for various purposes. However, getting the money is only the beginning. The payday loan still needs to be repaid on time.
Before deciding to apply for the loan, work on a plan to repay it. if you weren’t able to cut expenses to raise money in time for the emergency, you can now be more flexible with the timing and cut more expenses to raise funds for repaying the loan.
Make sure you can use the loan without hurting the next monthly budget or putting too much stress on it. Unless you can repay the loan immediately, you are looking at a potential financial issue that will not be as easy to solve.
Are you getting the best deal?
One last thing to do in order to be a responsible borrower is comparing payday loan deals available on the market. As mentioned before, the industry is incredibly competitive right now, so it is not surprising to find payday lenders making their services more appealing to customers through deals and special offers.
When searching for payday loans to compare, use online tools to get quotes from lenders in your area. Make sure you read through each offer thoroughly and that you focus on the total cost of using the loans as an aspect to compare.
You also want to consider the terms of the loan. Payday loans are designed for short-term use, but you have the option to stretch the loan over a longer period of time if needed. Lastly, check the requirements for the loan to make sure you can get one approved quickly.
Upon answering these questions, you can move forward with applying for the loan in a responsible manner. Being a responsible borrower lets you save money on the loan and benefit more from the financing option, all while getting the funds you need to cover your expenses and emergencies.