Payday Loan Pitfalls And Their Solution

Payday Loan Pitfalls And Their Solution
November 21, 2015 Stacey Corrin
Payday Loan Pitfalls And Their Solution

Why Is My Life Revolving Around Payday Loans?

The title says it all. Some of us use UK payday loans as a quick fix to tide us over until payday. Others struggle to repay them or have to take them out repeatedly to get by. Payday loans can be useful. Yet, there are some times when getting a payday loan is a bad idea and once you’re in a cycle of debt it can be hard to get out! In this article, we’ll cover these payday loan pitfalls and the escape plan.

Payday Loan Pitfalls #1: You borrow more than you can pay back.

Don’t borrow more than you can pay back. This goes for all forms of lending but it’s surprising how many people see instant money and want it all. The more you borrow the more interest you’ll have to pay, so only borrow the least amount you need. Borrowing too much could lead to buying things you don’t need.

As a result when your next payday rolls around you’ll still be paying for that. You’ll be paying a hefty amount of interest, too!

Payday Loan Pitfall #2: You didn’t plan ahead.

Plan ahead. An unforeseen expense may have hit you this month but you still have to pay your payday loan lender next month. You’ll be down a large amount of money from next month’s salary.

Work out a budget and a way to cope with losing that much cash. It’s important to know what you’ll have left over and how you’re going to spend it. This is especially true in order to avoid needing another loan.

Payday Loan Pitfall #3: You don’t talk to your lender.

Too many people don’t tell their lenders when they’re unable to pay off their loan. Talk to your lender. Your lender should be your new best friend. You should have their number on your phone and be able to call them when needed.

If you can’t make the payment for any reason, tell them. Payday loan companies, and almost all creditors, could escalate to debt collectors. This is so they can find out why you haven’t paid them. As such, it makes much more sense to keep a good stream of contact going if you cannot pay!

The Great Escape

It’s all gone wrong. What can you do? Talk to your lender. The trick here is to pay as much as you can afford every chance you get to clear your debt. Soon, there will be nothing left to pay. Good luck!

It’s also worth checking online for information. If you go to money saving sites, you may be able to find out information about switching providers for bills. They’re invaluable for a lot of people looking to recover high overdraft penalty charges. The same is true for fraudulently charged payment insurance.

Payday loans can be a useful thing for thousands of people, but they are a short term fix only. Using them to try to deal with larger financial problems may not help.  More so if you’re not sure that you will have the cash in your account to pay it back. Despite the various payday loan pitfalls, they can be a useful tool in responsible hands.

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