Getting a payday loan can seem incredibly tempting
You get fast money: immediate cash to splash out on whatever you want. But there is a reason that payday loans get the bad press that they do. It is extremely easy to get caught out with loans of this type, and you could end up in serious financial trouble. You should always think through things extremely carefully before jumping in to secure your payday loan. There are two key questions that you should ask yourself.

The first of these questions is, do you really need the loan in the first place?

There are times in your life where you might need a little extra money than usual. Maybe it is the run up to Christmas, or your spouse’s birthday. Perhaps you spend a bit too much this month and need something to tie you over so you can live comfortably until your pay cheque. Rather than taking what seems the quick, easy way out and getting a payday loan, consider your other options.

If you are waiting for your pay cheque at the end of the month, budget that time carefully. Plan out your meals, petrol and other expenses and make the money you have stretch until the month is up. This might mean you need to say ‘no’ to that night out, or even to a coffee in the cafeteria. Instead, pack your own lunches in the morning and take a thermos to work. Simply by being a little more organised, you can save a huge amount of money. It might be a little extra effort, but it could save you from having to take out a loan at all. When it comes to special occasions, your spouse will understand if you delay their present until next month. There are also cheaper options like making something personal yourself. Delaying Christmas celebrations until January is another great idea as you can take advantage of the sales and get much more for your money.

The second big question you need to ask is if you can really afford a loan

Payday loans are extremely expensive. The interest rates are enormous, sometimes with an annual percentage rate of 400% or more. This can lead into a downwards spiral towards debt. Taking a payday loan out because things are tight this month will just mean that things are even tighter next month. Many people end up taking out these loans regularly, taking the new loan out to cover the old one. This is a dangerous habit that will soon lead to debt. What’s more, the payday loan company will usually have access to your bank account. If you have insufficient funds you will be facing fees from your bank too.

There are many other options to consider before taking out a payday loan. For your own protection do not make this your first port of call. One mistake could lead to debt that lasts a lifetime.