Should you consider payday loans as a backup?

How to know if you should or should not consider payday loans?

09:15 21 April 2013

You see options for payday loans everywhere, even online, but what should you know before you try to get one? Are they right for you, or is there a better option for you? These are important questions to ask before you consider obtaining payday loans.

 

Since payday loans do typically have much higher interest rates on the borrowed amount than other lending options, it is in your best interest to check out low-interest options first before considering a payday loan.

 

Payday loans are for you if:

 

• Your credit rating is poor
• You are unable to obtain a different short term loan
• You need immediate funds
• You are not able to sell anything to collect the money
• You do not want to undergo a credit check
• You will be able to make a little more than the required monthly payments
• You do not qualify for assistance from the Social Fund
• You are unable to receive help from friends or family

 

Payday loans are not a good option for you if:

 

• You have time to shop around for the best interest rates
• You are approved for a regular short term loan at typical lending rates
• You have enough time to save up the necessary amount
• You qualify to receive assistance from the Social Fund
• You can use a low-interest credit card instead
• You have a good credit rating and can be approved for a different kind of loan
• You cannot afford the high monthly payments, or cannot pay a little extra on it to reduce the debt load sooner
• You have friends and family who may be able to give a loan
• You can sell unnecessary items to obtain the amount you need (or close to the amount)

 

If you do still end up needing to get payday loans, take time to shop around for the best rates if possible.

 

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