With the current abundance of payday loans and fast cash online today it’s easy to jump in and borrow money as and when you need it. Payday loan lenders are making it easier and easier to borrow between £50 and £1,000 for almost any reason, but with this new found ease comes a necessary increase in responsibility and caution. If you’re thinking of applying for a short term loan there certain things you must consider first, learn from other peoples mistakes and avoid making any yourself. In this article we’ll look at the top 3 mistakes people can make when applying for a payday loan.
Mistake 1: Not assessing your finances first
At their core level, payday loans are designed as a quick way to access funds which you can pay back within 30 days or on your next payday, whichever may come first. When applying for a loan you must be 100% sure that you can afford to pay it back in one go and on time. You should start by assessing your current financial situation, ask yourself if the reason you are applying for a loan is as urgent as you first thought and if not, could it wait until the end of the month?
Mistake 2: Using a payday loan to pay off debts
Payday loans can be used for a myriad of different reasons; for example, avoiding hefty bank charges, buying the latest gadgets before pay day or to cover unexpected repair bills. These types of loans should never be used to pay off existing debts, especially other payday loans. Because they are designed as a short term solution the interest you would pay month on month will be extortionate and will soon be far too much to pay off in one go.
Mistake 3: Not reading the details of your contract
In this day and age it’s almost second nature to skim important documents like terms & conditions but with important financial contracts like the one you’d be asked to sign when applying for a payday loan it’s vital that you read and re-read your contract thoroughly. There are clauses that you must stick to if you’re going to pay back your loan on time and in an orderly fashion.
Now that you’ve learnt about the top 3 mistakes people make when applying for a short term loan you can hopefully go ahead and apply online safe in the knowledge you’re not going to fall into the same problems others have made before you. Payday loans can be a fantastic source of funds and in some situations a genuine life-saver.