Need A Payday Loan? Plan Now To Avoid Revolving Debt

22 January 2016
 Categories: Finance & Money, Blog


With so many people living paycheck to paycheck, payday loans serve a real and basic financial need for many people. Often, a payday loan can mean the difference between being able to fix the car and not having transportation to work. For many people, payday loans are an invaluable blessing. However, about 80 percent of those who borrow do so again within a few weeks, and some find that they cannot afford to pay off their loans. They pay off one loan only to turn around and take out another. This revolving debt cycle results in them paying interest on the same borrowed money repeatedly.

Fortunately, the cycle of debt can be avoided with a little planning ahead of time. If you need to take out a payday loan, follow these tips for avoiding the revolving debt cycle. 

Borrow Only What You Need

Never borrow more than you need. Remember, you will have to pay off the loan when you get your next paycheck. If you borrow a lot of money, you will have to use a large portion of your check to pay it off, leaving you with little to no money to live on. If this happens, you may find it extremely difficult to get by until your next paycheck without taking out a subsequent loan. 

Borrow Only What You Can Afford

Think ahead to your next paycheck and the items it will have to cover. If you're going to have money left over after meeting your financial obligations, it's probably safe to take out a payday loan. However, you should never borrow more than you can afford to pay back out of your next check without having to skimp on other necessities or responsibilities. 

Establish A Repayment Plan

If you have a true emergency that's going to cost more than you can reasonably afford with your next check, establish a disciplined repayment plan at the time you take out the loan. If you can spare $50 out of each check to pay off the loan, make sure your balance is dropping by $50 with each paycheck. While it's tempting to borrow the same amount immediately after you pay off the loan, you should strive to make the balance smaller each time you make a payment.  

Payday loans can be a huge blessing in your time of need, but you need to use them responsibly. Do all that you can before taking out your loan to ensure that you won't end up in the revolving debt cycle. If you're considering taking out a payday loan, talk to a local payday lender like Payday Express for more information about the right loan for you.