When you need cash for an emergency but your salary will not come for another two to three weeks, there is one option that you can consider – payday loan. Payday loans are short-term loans with a straightforward application and shorter approval time.
Whether or not you have bad credit, a $3000 loan will be considered by lenders but before you apply, here are some tips you need to consider:
Calculate how much you need
Whatever loan you are considering, the first thing that you should do is to calculate how much money you really need. Do not skip this step because once you figured out the amount you really need, you can identify the option that is right for you.
Payday loans have a higher interest rate and shorter terms. With this, you have to ensure that you only borrow what you really need so you can repay it according to the stipulated time. If you borrow more than you need, you will end up paying more on the interest rate.
Assess how much you can afford to pay back
Now that you know the amount you want to borrow, the next step is to assess how much you can afford to pay back. You should take time assessing how much you can afford to pay back every month so you can make the right decision.
There are some lenders that will try to entice borrowers with lower repayments. You should try to avoid this type of arrangement even if you have a hard time meeting your commitments. The reason is simple – the longer the loan, the more you need to pay in interest.
Read the fine print
Whether it is payday loan or bank loan, it is important that you read the fine print or terms and conditions carefully. There are state regulations that govern the lenders but they have their own terms and conditions as well.
With this in mind, you have to read it and determine if you feel comfortable. You have to remember that you are not obligated to accept any loan offered by a lender – especially if you do not like whatever is written on the contract.
Understand the risks
Before you borrow, you have to understand the risks. If you fail to understand the risk, you will end up owing more. For instance, if you fail to pay the loan altogether, you will end up with penalties and other fees.
Make sure that you borrow from regulated lenders
More importantly, you should make sure that you borrow from regulated lenders. With this, you are assured that there is a body that oversees them. You will also have a peace of mind knowing that there is some recourse when they take advantage of you.
Final thoughts
The payday loan should only be considered as your last resort. Before you apply, make sure that you really need the loan to cover an emergency. More importantly, you should decide the amount you are comfortable borrowing and the size of the repayments you can afford. When you are ready, do not forget to read the terms and conditions of the loan so you will know what to expect in the long run.