Payday loans are a type of short-time loans that have high-interest rates. These loans range from $500 to $1500 and are to be repaid within two weeks or months or other agreed-upon time depending on the amount of money borrowed. These loans are typically taken by people who are in desperate need of money for emergency and other uses as they lack sufficient funds, also these loans have a reputation for luring low-income people with little financial literacy into monthly debt. These loans can be sanctioned within minutes as the only requirement you need is that you should have valid if proof, an active bank account, and a source of income. It does not matter whether you have a good credit score or bad and they also don’t contribute towards your credit score which allows you to get better financial deals in the future. If you want to know more about payday loans or want to calculate the interest rates then you should check out https://tryascend.com/blog/3-month-payday-loans/.
The question of when to avoid taking payday loans is very simple; you should avoid it always unless there is no other alternative and you are in dire need of money but keep in mind that you should only borrow a sum that you can repay within the due date because there is a good chance you will end up extending your loan and turning more extra fee every month.
Other situations where you can avoid payday loans:
If you are behind rent
If you are unable to pay the rent of the month, then you should talk to your landlord about extending a few more days rather than quickly applying for a payday loan. It can work most of the time and everyone will be sympathetic to the situation if you don’t overdo it.
If you are behind your bills
One other situation where you might be tempted to apply for a payday loan is covering your monthly bills. In such cases, you can talk to your authorities and besides many authorities give you extra time for repayment. Do not fall for payday loans to cover your minimum amounts of the month.
If you can ask your friend and family
Asking your family or friends for money can be awkward and embarrassing but if their help is something you can avail, then you should avoid payday loans. It is better than falling for short period loans that can suck every ounce of capital out of you.