In today’s era, sometimes paying bills is a struggle enough. Let alone having enough income left over to pay for groceries, a night to the movie or an unexpected expense. Simply put, some days we do not have enough money to live.
According to a study done in 2017, the amount of Americans with less than $1,000 in their savings account is 57 percent. To make that a little more worrisome, 39 percent of Americans have no savings. The numbers increase for younger generations.
Luckily there are ways to access small amounts of money quick for when those emergencies do pop up. Payday loans are available in which you can get a reasonable amount of money to help cover expenses and get you back on your feet.
Here are a few tips on payday loans in case you need to get one.
Payday Loan Explanation
First, you need to know what a payday loan is. Companies like www.mrlender.com lend money to the applicant, usually up to $1,000. You then pay back the loan, and any interest acquired, on your next pay date.
Typically these are meant to be short-term loans, roughly 30 days. They are available for when an expense occurs that your disposable income cannot cover. More than likely the approval process is relatively quick, so you have access to the money right away.
Consider Why You Need One
Before apply, strongly consider why you need the loan. These types of loans tend to have higher interest rates compared to long-term bank loans. This can make it difficult to pay it off in the 30-day cycle. So if you are in need of a long-term solution rather than a quick fix, you may want to reconsider your payday loan.
However, if your car breaks down and you need to fix it right away, a payday loan may be beneficial if you do not have enough disposable income available. These loans are best for short-term solutions to unexpected costs.
Review the Interest Charges
Looking at the interest charges on a payday loan is a must. The interest rate on a short-term loan can be in the hundreds, compared to bank loans and credit cards which are a fraction of that. So not only will you have to repay the amount you borrowed, you will have to pay back interest as well.
So don’t ignore the interest rate when applying for a loan. If you are unable to pay it back, you could get yourself stuck in a cycle of continually owing the company tons of money.
One at a Time
When using a payday loan, stick with using one at a time and from one company. In some areas, using multiple payday loans from different companies is prohibited. More than likely you would not get approved if you were to take on a second short-term loan.
Remember, payday loans are best used for short-term financial solutions, not long-term. Taking on multiple loans likely means you cannot afford what you are buying, and cannot afford to pay back the loans.