Payday loans are expensive forms of borrowing. They present high-interest rates and stiff penalties for not paying back the loan. Payday loans are a helpful alternative when you need short-term emergency cash for medical expenses or house repairs, but not so much for major purchases like buying an apartment or car. Before you decide on applying for a payday loan, you’ll want to consider a few factors. From there, you can come up with a few other choices that might be more beneficial to you in the long run.
Am I okay with a small amount of cash?
Payday lenders don’t usually extend large amounts of cash at once. Many people use payday loans, but expect to get anywhere between $300 and $1,000, and rarely higher than that, though the amount depends on the lender. These types of loans are a good idea if your short-term cash needs can be effectively managed without fear of your life collapsing. Therefore, you should only consider payday loans when you need money for bills or expenses right now. Additionally, taking out multiple payday loans at once will only cost you, considering the added interest you’ll have to pay.
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Can I make my payments as scheduled?
Consider skipping over a payday loan if you don’t have a steady stream of income. Most payday lenders will want to work with clients who have decent credit (though bad credit lenders exist), and maintain a steady job that shows they’ll be getting a deposit in their bank account every week. Part of making sure you’ll be able to pay means verifying the number of funds you currently have in your bank account. As long as you don’t have to worry about falling behind, applying for a payday loan might not necessarily be a bad idea.
What to do before applying for a payday loan
Make sure you look at the future ahead before applying. Do you want to be paying extra in fees and in interest? Does owing more money to someone you don’t know to keep you up at all hours of the night? Sometimes, the risk may have more to do with the impact that a payday loan has on your entire family and your financial picture going forward.
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Here are three other decisions you can make before applying for a payday loan.
Add another stream of income
If you’re working 9-5, consider starting a freelance business around your passions and interests. You can launch a website from WordPress and use a content writing strategy along with Facebook and Twitter to promote your business from start to finish. Promote and sell the right products and find the right audience, and you’ll get ahead. You’ll generate another source of income that adds money back into your wallet faster.
Remember, you should have a clear background before applying for a loan because most the companies use employment background screening.
Apply for a line of credit
To receive a lower interest rate, apply for a credit card with your bank. Having a credit card will present you with opportunities to earn cashback and rewards points. Instead of having to pay back your purchases in a week, you’ll have the added benefit of making a minimum payment once a month. Sometimes, another line of credit is better than applying for a payday loan.
The idea of waiting to apply for a payday loan is to make sure you choose the best options first. Even if you have a hard time letting go, selling some of your unwanted property is a good way to generate quick cash fast, particularly if you’re in possession of technology. Many people will pay a few extra dollars for newer devices that are in decent condition. So, if you’re looking for money today, then start with the money you have sitting in the basement. Chances are, you might be able to hold off a little while longer on the loan.
A payday loan isn’t always the best way to borrow. And Merchant Cash Advance Canada-based? A financial solution among many. You might like a quick cash advance whenever you’re ready. But payday loans can cost you more over time. At least, now you know what to do instead.