5 Factors to Consider Before Applying for Instant Payday Loans
Life is unpredictable, and for this reason, you may find yourself in a situation where you need some cash instantly. You have a job but, it’s in the middle of the month so you won’t be getting any money until end month. Due to the urgency of the problem, you need some cash pronto, and you cannot even access your savings. So what do you do? How about considering a payday loan? You are proud of yourself for finding a quick solution to your problem. But wait, what are the things you need to know before applying for a payday loan?
Below are some factors to consider before applying for instant payday loans.
- Other financial obligations
A payday loan is a loan just like others. The difference maybe only some few factors here and there. However, just like in any other loan, you make a financial obligation to repay it back. You need to be very frank to yourself and know whether you are in a position to service this loan. List all your other financial obligations and determine whether you can spare some extra cash to go to your payday loan. Doing this will help you know how much money you can take and how long it will take you to pay back.
- How flexible is this loan?
It is not common knowledge, but the fact is, you can always ask for an extension if you fail to pay after your payday. Establish from the company offering you the loan and know whether they offer extensions. This flexibility can save you a lot of money in the form of penalties not to mention the embarrassment. Some companies are generous enough to offer you an extension of up to 4 paydays to repay.
- What is the interest and the payment terms?
Ask yourself this important question; it will save you so much agony and surprises. Determine from the company offering you instant payday loans, the percentage of the interest charged. Also, ask about the payment terms and whether there are another hidden costs involved. Let them give you different payment options and determine the one which will work best for you.
- Your financial plan
Assuming that you intend to repay the entire amount owed on your next payday, determine how you will cover the deficit in the following month’s budget. As much as you have dealt with the emergency, some recurring bills will have to be paid. Properly plan your finances to ensure you move on smoothly without having to borrow again. Plan with what you have and avoid planning for the money you are expecting from unreliable sources.
- Your reason for taking the loan
A short-term loan cannot meet your long-term needs. These loans are meant for emergencies such as medical or accidental costs. Be sure to use the cash you get wisely, avoid taking payday loans for luxury purposes like a vacation.
These and many more factors should be considered before applying for that instant payday loan. Be sure to take all the precautions when selecting a company that will offer you the loan.