Online payday loans are pretty much everywhere these days, and chances are you’ve seen an advertisement for one in the last 48 hours. When you’re short of cash and you need to pay a bill or simply get ahead of your finances so you don’t get in trouble on a rainy day, online payday loans can be there for you.
While they are certainly a viable option for many people, you do need to think twice about whether or not you’re the right candidate for a payday loan if you don’t want to damage your future finances and credit score.
You want to be sure that online payday loans can really help you and that you can repay the money without hurting yourself.
Before applying for online payday loans make sure you consider the criteria below:
How Will Online Payday Loans Help You?
There could be several reasons why you are applying for an online payday loan. For example, you might be short on your rent payment and facing eviction or not have enough money to pay your bill to keep the lights on. These are concerns that many people face in times of hardship.
While a payday loan can help you here, you need to make sure you’re not putting yourself in a worse financial spot by getting one. When you have to pay the loan back and you can’t, will you be in a worse spot than before?
If you just got a job and are waiting for a paycheck though, you could be an ideal candidate for online payday loans. You might be just a little short on money maybe, because of an unexpected medical bill, or because your child needs something. But, if you are employed – you could also be an excellent candidate for seeking a cash loan online.
Getting Ahead of Finances
When you just start a new job or you’re struggling from paycheck to paycheck, it’s easy to say that you’d be much more comfortable if you just had an extra few dollars in the bank.
Online payday loans can help you put that little bit of money in your bank account quickly so that you have something saved for a rainy day. Best of all, you’ll be able to slowly pay back the loan over time instead of in a lump sum. Though you will have interest on the money you pay back, this can be enough to help you get ahead and secure your financial future – at least for a few months.
It’s not ideal to be living paycheck to paycheck, and even having $1,000 in the bank for a rainy day can be a real benefit for most people. If you’re considering using online payday loans to get ahead of bills and rent in this manner just make sure you can afford the payments when they come around each month.
Paying the Loan Back
When you get an online payday loan you need to have a plan about how you’re going to pay the money back. If you don’t, the payments could easily sneak up on you and leave you feeling broke once again. That’s not what you want after just getting an online payday loan to help improve your finances.
To figure out how you can pay the loan back, you should determine how much money you make each month and how much you spend. From there, you should be able to figure out how much you can pay back on the loan each month.
Even if your payments are not due right away, it is ideal to put some money aside right away from the first month. By doing this, you give yourself a little bit of an extra cushion which is exactly what you want after applying for online payday loans.
A good idea is to also build up 1% or 2% of the room in your budget to make sure you aren’t cutting it too close. It’s very easy to overspend on something one month.