Payday loan providers will tell you all kinds of things when it comes to using their services: how fast you can get your money, how easy it is to apply for payday loans online, and how there’s never a credit check. These are all true, but they oftentimes conveniently leave out the fact that many lenders charge rather exorbitant rates for the privilege of securing these instant cash loans – and they never really give you any information as to when you should be borrowing cash until payday.
Don’t believe the hype
Let’s say this up front: sometimes, payday lending can be useful in some (very rare) instances. However, these instances are only when you use payday lending quite sparingly in order to cope with a financial emergency, and only when you’re going to be able to repay the loan on time and without issue.
We’ve nearly all been there, as it’s a textbook definition of ‘being between a rock and a hard place:’ you’ve got a sudden bill that needs to be paid immediately, but you’re still a week (or more) away from your next pay period when you would be able to afford it. This is where taking out a payday loan can actually solve your problems, provided you don’t take out any more cash than you have to and that repaying the loan on your next payday won’t leave you with more financial problems than you had before you took out the loan – but this is really the only time that payday loans are ‘safe’ to take out.
not meant for a night out with the lads
A good number of payday lenders try to be as socially responsible by advertising their services as a way to cope with these financial emergencies. While the government has cracked down on some of this behaviour, some lenders have encouraged people to take out loans for the wrong reasons such as financing shopping trips or simply providing you with the extra cash for a night at the local for a few pints with the lads.
Consumer advocates have taken a dim view of lenders that participate in these sort of irresponsible advert campaigns for a good reason: they tend to work all too well, luring unsuspecting Brits into taking out a loan that they really can’t repay just for a few extra quid in their pockets. When it costs around £25 in interest for every £100 borrowed from a payday lender, fees can add up quite quickly – especially if you’re the kind of bloke that blows your cash on a round of drinks for all your friends and neighbours – so just do yourself a favour and stay home that night instead of getting roped into a lending arrangement that’s going to cause you a world of hurt once the repayment becomes due!