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When is a Payday Loan Wrong?

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There are certain circumstances when a payday loan can be a very useful tool to get out of a tight financial predicament, but they should not be taken out willy-nilly for every tricky situation because that would probably cause worse financial hardship.

Nowadays more than ever, a person needs to think prudently and clearly about the financial choice they make before jumping into the one that appears to be the easiest in the short term.

Expected/regular bills – a regular bill of any sort, be it monthly, quarterly or even annually, should have been prepared for. If it hasn’t, then you need to ask yourself why not? A payday loan is clearly not the answer, as all it will do is simply delay the inevitable until the next regular bill that is due comes along.

Credit card/loan repayments – to use a payday loan to pay off a credit card bill is a definite no no! It will just take you on a downward spiral and will not solve the problem. Check out the minimum monthly credit card repayment, but repay a little more if you can afford to. The ultimate plan has to be to get the balance completely paid off, but not at the expense of a short term loan.

Rent/mortgage payment – monthly rent or a mortgage premium can be pretty expensive and some months will appear harder to afford than others. However, this is a scenario that must never be satisfied with a payday loan. It is paramount to satisfy these payments, even if it means cutting back on other monthly expenses.

If it becomes an ongoing problem, it would be wiser to face the issue head on by either speaking to your landlord (if you rent), or having a chat with your bank or building society (if you are paying off a mortgage). 

This course of action may sound extremely daunting to some, so if you are concerned about taking this kind of approach, there are services with helplines that can give you the support needed to guide you through the process. Money Advice Service or Shelter are worth speaking to if you are experiencing rental problems. Contact the Council of Mortgage Lenders if you are struggling with your mortgage.  In the long term, you will be pleased you decided to take this route.

Shopping spree – buying clothes can be great fun and very therapeutic when feeling depressed, but if you get a payday loan in order to meet this expense, chances are you will become more depressed in the not too distant future. However, if you use the loan to purchase clothes or a type of uniform needed for a new job, then that is a different ball game because you are investing in yourself.

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Things for the house – isn’t it great to purchase something new for your home? Perhaps it’s an impulse buy such as a piece of equipment from the latest electronic technology, or just something you’ve been longing for. Whichever the reason, it is not sensible to pay for the item by means of a short term loan. Things like these can and must wait until you can afford them in a normal fashion. They are certainly not an emergency. If it becomes a struggle to pay for them, the enjoyment from these articles will soon evaporate!

To go on holiday – fancy a holiday somewhere? Life is just getting too darn hard and need to get away? This is an expenditure that must not be paid for with a payday loan. Life will only become harder when you return and are struggling to pay off the extra debt you have accumulated by taking out the loan.

For money to go out – if you need money to go out for the evening, then use your imagination to go somewhere reasonable. Very often the expensive evenings aren’t all they’re cracked up to be. If you’re honest with your friends about keeping the price down, you will probably find out that many of them are on the same wave length, but didn’t want to speak up.

If it’s a family day out, then there are plenty of places that have free admission. Check out our series of ‘Free family days out’ across the country with more areas to follow in our blog.

Home/garden/car improvements – it is not a good idea to use this type of loan for a home or car improvement. A repair may be essential, but it is not advisable to take them out for a home or car upgrade.

To pay off another payday loan – the majority of loan applicants will go through the repayment process trouble free, but if you have a difficulty repaying a payday loan, do not take out another one to repay it. This would be financial suicide!

About the author

David Griffin David Griffin trained as a graphic designer and now helps PaydayLoan123 with social media. He is a born and bred Londoner who has recently moved out of the capital and is probably missing it a little too much. He enjoys fishing, playing golf and working out at the gym, when he feels energetic enough!

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