Running out of cash can be an incredibly stressful occurrence for anybody. Unfortunately, there’s not much you can do when you don’t have cash, except rely on credit cards to get you through, which can severely damage your credit score. For people that don’t have much credit, that isn’t even an option.
That’s when many people seek out online payday loans. Online payday loans can allow you to get some cash in your pocket so you can take care of the essentials, like groceries, gas or electricity.
Unfortunately, online payday loans aren’t something you should rely on for the long term, and they should really only be used for emergencies. Keep reading to learn why online payday loans aren’t just a form of cash, and why they should be one of your last resorts when it comes to putting some extra cash in your pocket and taking care of essential bills.
Payday Loans Create Debt
When you’re running low on money, the last thing you really need is more debt. After all, it’s just going to be that much harder to get back to square one and living comfortably within your means when you have payday loans to pay back.
That extra debt is a major reason why payday loans should only be used for real emergencies and not just things you think you need. In most cases, going without is better for your finances in the long run.
High Interest Rates
When you take out a payday loan, you can stay on your feet a bit longer than you might have otherwise. For many people, it’s the only solution that is available.
However, most payday loans come with somewhat high interest rates that require the person to pay back considerably more than they borrowed. While these types of payday loans are fine for people who are employed and can pay back the money quickly, so interest rates don’t get out of control, not everybody who takes one out can afford to do that.
Over time, those high interest rates can cost you a lot more than you borrowed.