Questions to Ask Yourself and The Lender Before Applying for Payday Loan 

Payday loans are a relief for people who need cash instantly due to some unpredicted emergencies like hospitalization or car repair. Your aim is to borrow a specific loan amount and repay it from your coming months’ salary. For some people, this aim never works. It is a loan type that needs high interest and if you cannot pay, you can end up in a terrible loan cycle that can take months or years to get out.

Before you look for a short term loan direct lender there are some questions you need to ask yourself to ensure your decision is right. Besides, there are multiple lenders but each one has its terms and conditions. You need to know them or else you can end up paying more than necessary. For example, LoanPig identifies Short Term loans that need to be repaid within 3 to 1 months. Even if you pay it completely within a month there will be no penalties. On the other hand, some lenders charge a penalty for repaying short-term loan amount earlier.

Ask yourself the following questions

Payday loans are easily accessible, but costly. They can dent your financial statistics if handled poorly. Before you commit, ask yourself the following questions.

Am I adding more strain on my financial problems? – Currently, you are struggling to keep up with your monthly expenses and a payday loan can only worsen the situation. If you get connected with some predatory lender, you can end up in a malicious debt cycle. It is wiser to get educated on debt management and work with a credit counselor.

Is there a genuine need for cash right now? – Payday loans are associated with high interest. Currently, you may like this option for handling your financial problem, but it can cost you more than you expect.

Can I handle the financial crunch until the next payday? – You can find ways like ask friends or family for a loan or raise extra cash through selling electronics or clothes that you don’t use online. If it is for a car repair, you can request a colleague to pick you up and get the restoration done next month. You have some days until you get your salary if it is possible to choose other options rather than applying for a payday loan. You can even look for extra job hours as an alternative to cover your expenses later.

Will I repay the loan on time? – Payday loan means you need to pay as soon as you get your salary. If your salary is $1000 and you borrowed $500 then consider the other expenses. Will you be able to handle the month with the remaining $500? If the loan is not paid on-time then things can worsen and you end up in serious financial problems.

Questions to ask a potential payday lender

Are you licensed? – Borrowers get protection from the state’s law if they borrow from a licensed lender.

How much will a payday loan cost? – Before signing be clear on the interest, upfront fees, and repayment policies. Have everything in writing to avoid any bad surprises.

What is the condition associated with a missed deadline? – Find out what penalty they charge for missing a deadline.

Make sure to read every fine print before accepting payday loan cash. If you can find an alternative solution to resolve your cash issues, it is great!