Payday loans are useful as long as they are used responsibly. Just like any other financial solution, the last thing you or your lender wants, is for things to go wrong. In this article, we’re going over the 5 most common mistakes that people tend to make when looking for a payday loan. Have a read through these pointers to make sure you don’t stumble over the same hurdles.
1. Taking a payday loan to buy a car
Payday loans are designed for emergencies, not luxury purchases. If you rely on your vehicle for work or safety and it suddenly breaks down, that’s a very different situation to what we mean. Emergency repairs are certainly one of the prime reasons so many people rely on short-term fast loans. But if you’re thinking about buying a new car just because you fancy one, that’s not really a good enough reason to take out a payday solution.
2. Using a payday loan to invest in shares
This is a subject that’s spoken about a lot in media, especially on sites with a “get-rich-quick” scheme. The truth is, trading shares is a complex and highly volatile activity that’s likely to cost beginners far more than they thought it would. The blogs and articles you read might make it sound like a piece of cake, but the authors of such guides are usually highly experienced traders that know exactly what they’re doing. To them, it’s a far more feasible risk to take, but for the rest of us normal people, it’s more than likely going to end in a huge loss.
Get-rich-quick ideas are never going to be as effective as simply saving money wherever you can. Playing the field with financial solutions can get you into far more trouble than anyone would ever want, so it’s really not worth the mountain of risks involved.
3. Using the funds to pay other debts
Whether your debt is with lender companies, banks or loans from family, you could find yourself sinking into an ever increasing pool of financial trouble if you use loans to pay for other loans. Borrowing of any kind from any form of credit company always impacts your credit history, so continuing to borrow and adding to your pile of debt is never going to look good on your record.
Payday loans are meant to be paid back very quickly, and if you miss the deadline, fees could be applied to the amount you owe. This makes them absolutely unsuitable for paying other debts as your account will grow the longer you fail to make repayments.
4. Being tricked by lenders that promise money in minutes
This promise is something you should never believe. At Pretty Penny Loans, we do our best to ensure the application process is completed as quickly as possible, and that the funds are usually paid out the same day you’re approved, but money in minutes is just not realistic. There are a wealth of quick loans companies out there and some will be cheeky enough to suggest that you can have thousands of dollars paid into your account within 10 minutes or less of clicking their links. The golden rule stands; if it’s too good to be true, it’s usually a lie.
By contrast, we try and be as upfront and honest with our offering as we can be, this way you have all the information you need and don’t have expectations that are impossible to meet. There’s always going to be a careful procedure to any application which is almost always going to take longer than just a few minutes. In most cases, we’ll be able to pay funds out within hours, and that’s as fast as you should expect from any credible and professionally regulated source.
5. Not contacting the lender when you have trouble paying the loan back
This is a crucial mistake that too many borrowers tend to make. The very best thing you can do as soon as you realise you might not be able to pay back what you owe in time, is contact your lender. As your loan issuer, it’s in our best interest to understand your situation and work with you to find a helpful solution. In the vast majority of cases, we’ll be able to reschedule your repayment plan and avoid applying further fees to your account.