Payday loans are a common form of borrowing for poorer people who live from paycheck to paycheck. A sudden emergency arises, and a payday loan, effectively an advance on salary with a charge attached, seems like a good idea. And indeed it is, if it’s just something that you resort to on an occasional basis. However there is a danger that once you start down the payday loan route, you end up in a perpetual cycle of expensive borrowing.
So if you decide that you really need a payday loan, then make sure it’s for something absolutely unavoidable, such as an urgent vehicle repair to enable you to get to work. If it’s for something that isn’t urgent, then pass, and wait until payday, no matter how tempting it is to have the money right now in your hands.
Payday loan companies obviously want to encourage you to use their services, and they can be very useful on the odd occasion. But if you find that you are getting a payday loan most weeks, then you need to look at how you can rein back and get out of the cycle of borrowing. Payday loans as a once off thing are reasonably priced, but if you are getting them frequently, then they are very expensive. A few extra dollars each week might not seem like much, but it soon adds up to a large amount that poorer people can least of all afford.
Once you start borrowing against your wages or salary, there is a danger that you never catch up, you have to keep on borrowing. This is a treadmill that you don’t want to get on.