This month, we are focusing on the pros and cons of PayDay Loans.   Are they as good as they seem? Here are some important questions to ask yourself before using one.

Am I already dealing with financial issues?

If you find that you struggle to pay your bills on a monthly basis then a payday loan will only make your current situation worse. Most payday loan companies are predatory lenders that will quickly double your debt and garnish your wages. Look in to working with a credit counsellor, they can help you with debt management and offer ways to get you on a budget.

Do I really need this money right now?

One of the reasons why this is such an important question to ask yourself is because of the hidden charges and high interest fees associated with payday loans. It might seem like you’ve found a great solution for your financial issues but in reality a payday loan costs more than double what you think.

Can I manage until my next payday?

Some people can find resourceful ways to get extra money through yard sales, selling extra clothes and electronics on sites like EBay or by asking friends or family members for a small loan. Any of these options are better than choosing a payday loan, especially if you only have a few days until your next paycheque.

Are there cheaper alternatives I haven’t thought of?

If you don’t want to ask your friends or family members for help then you need to consider other cheaper alternatives. A small short term personal loan can help you cover your expenses and won’t cost anywhere near as much as a payday loan.

Will I be able to pay the loan back on time?

If you answer no to this question then getting any type of loan, let alone a payday loan should not be an option for you right now. Not paying back a loan on time is one of the worst things you can do for your credit score and could cause serious financial issues for you in the future.

Will paying off a payday loan make me fall behind on my other bills?

If you decide to take out a payday loan and then devote all your income to paying it back you’ll probably have to neglect all your other bills, this will make your financial situation even worse.

Can I ask for additional hours at my job?

If it’s a possibility for you to ask for more hours to make more money than you need to do so right away, this could help you make the extra cash you need and keep you from taking out a payday loan.