Payday loans. If you’ve heard of them, you’ve probably heard that they’re extortive, maybe even illegal in the state you live in. But payday loans can serve a useful, even life-saving purpose if they’re handled wisely. They can be a risky road to take, but with proper knowledge and careful planning, you can use instant approval payday loans to get yourself out of some sticky situations.
Instant approval payday loans are loans that are approved quickly, paid out quickly, and typically closed quickly as well, within a matter of weeks of the loan being taken out. The point of payday loans is that they give you an extra “payday,” and typically are reserved for sudden emergency expenses. Maybe you totaled your car or had a bad accident, or otherwise need a large chunk of cash quickly and unexpectedly. Payday loans can help you out, but they come with the catch of very high-interest rates, and the unknowing can tank their finances with an unwise payday loan. The best defense against this? Knowing how to use them, and here are some tips:
Don’t use them for regular payments
Don’t fall into the trap of using a payday loan for your rent or bills. Doing this once creates the temptation of doing it again, and that’s bad money management. Payday loans should be reserved exclusively for one-time crises, such as injury or accident. You don’t want to be stuck paying high interest on multiple payday loans because you fell into this trap.
Be aware of interest
Interest rates on payday loans are high, around 250% – so much higher than your credit card or typical bank loans. The exact rate and the laws associated with it fluctuate from state to state, so it’s impossible to give solid information on loan rates. Make sure you know just how much you’ll be expected to pay back and in what timeframe. And of course, make sure you can make that payment.
Never take out more than one
Payday loans can be a tempting escape hatch, but they’re for emergency uses only. Due to the short time frame, you pay these off in, a properly handled loan should be out of your hair quickly. As such, you should never have more than one payday loan out at a time. If you haven’t paid off your last but are thinking of another, try to find a better option. And of course, never use a payday loan to pay off other debt.
If you keep these tips in mind and follow them closely, you should be able to manage a payday loan smartly and without issue. Asking a financial professional about the pros and cons of payday loans for yourself is always a good idea. Always keep in mind that you have to handle these carefully.