Bad Credit Woes Know Your Foes

Everyone needs a little extra financial help sometimes, and payday loans offer an option that can sometimes seem like a great deal with less hassle. However, there are a few things you should be aware of when shopping for a payday loan. Keep these quick checks in mind, and don’t be afraid to walk away from a deal that seems too good to be true.

Hiding in plain sight.

Sometimes, payday lenders put a lot of information into the fine print. They’re counting on the fact that you really need the money (else why would you be there?), so you may not want to take the time to read over everything in the documents. But here’s the thing: as long as they put it in the documents somewhere, they can charge you any number of fees, because they notified you that you would be charged. It’s up to you to read everything they set before you, and ask questions if you don’t understand.

Snaring you tight.

When you’re in a financial emergency, you don’t really have any choice. You need the money, and if you have less-than-stellar credit, you may have only one or two choices for securing a payday loan. A lot of times, any loan you can get will have hard-to-meet rates and terms, which can be designed to trap you in a cycle of debt. There’s really no way to avoid this one; you mainly just have to use your gut and trust your instincts about whether the lender you’re dealing with is setting you up for cycling debt failure, or actually there to help you. The only surefire way to avoid being trapped in a payday loan debt cycle is to not take out a payday loan at all. If you have to, though, just be very careful, and only take enough out that you can pay back as soon as it comes due.

Say goodnight, and turn on the light.

The best way to avoid becoming trapped by a payday loan disaster is to do everything in your power to build up a savings cushion before you need it. It may seem impossible, but it’s not if you play your cards right. Keeping a change jar is a basic but helpful idea; emptying your pockets of loose change at the end of every day will keep your pants from stretching out, and can provide an easy way to start saving. Another option many people find useful is to minimize excess expenses; instead of buying a coffee on the way to work every morning, take one day each week and make your coffee at home. Instead of having the steak at dinner on Friday night, have the grilled chicken and salad instead. Pack a lunch a couple of times each week, and eat leftovers a couple of nights, as well. These won’t save you much at once, but a couple of dollars here and a few cents there eventually add up. The trick is to take those hard-won pennies and put them away safely. The hardest thing is not saving the money itself; it’s refraining from spending them as they start to add up. New apps like Acorns and Stash are helpful for those interested in getting into investments and stocks, as you can get started with minimal cash ($5-10, usually).

Being proactive is one of the only ways to become financially stable in the long-term. It’s hard to get started, and even harder to wait to see the eventual results, but it is more than worth it in the end. Hold on tight, and breathe deep; it’s time to enjoy the ride.