Repeated Use Of Payday Loans Can Dig A Hole Too Deep To Escape
Submitted by: I-Newswire
Florida (OPENPRESS) June 24, 2011 - Payday loans provide immediate cash for emergencies. But due to the fact that they come with an easy application process, and are easy to use and repay, it can be easy to get into a payday loan trap. If you fall into this trap, you'll find yourself paying back much more than the original loan amount.
So if you find yourself in this type of predicament, how do you get out of it?
First of all, review your finances. Look at your ability to repay the full amount of your payday loan. If it's not possible, review your payment options. Create a realistic budget and allocate a portion of each paycheck toward repayment of your payday loan.
Avoid taking out additional payday personal loans. Taking money from one payday loan to reduce interest or pay off another loan will only continue a vicious cycle of debt which will be extremely difficult to get out from under. Set up or adjust your budget in order to accommodate your payment to be sure you continue making the payments and that you get the debt repaid in the allotted time.
After you've repaid the debt, say goodbye to payday loans. If you can keep a credit card or set up an emergency savings account to handle unexpected expenses, you won't have a need for payday loans in the future. Even those with poor credit, there are credit card companies offering secured credit cards if you pay into a savings account as collateral. These cards report to the credit bureaus, and if you pay on time, you can improve your credit score.
Although repeated use of payday loans is a poor practice, using them once in a while when you are sure you can repay it on time and in full is acceptable. Use them for the purpose for which they were intended, though - only on occasion and when you have no other alternative.