In times of crisis, Payday Loans are a way out for those who are in debt and want to regularize their financial situation. Enlisting the help of banks and finance companies and exchanging a high and expensive credit card andor overdraft charge, for example, may be a good idea, but before knocking on the door of institutions to borrow money, it is essential to take some precautions to avoid having a headache in the future.
Check out four tips to not make a mistake in the search for a Payday Loan and take the first step to balance your financial life:
Research the interest rate in several banks and financial companies
To make sure you are getting the best deal, it is important to do some research and analyze the interest rate charged at various banks and finance companies. The amount varies a lot from one institution to another, so separate the companies that charge the best rates and negotiate only with them. When doing the math, do not forget to put on paper the other fees charged, such as a late fee.
Also compare the Total Effective Cost (CET) charged by companies, which comprises all the costs of the loan you are asking for. To help you in your research, Cream Bank offers you two options: the website with the comparison of rates and the comparator within the application itself.
Organize your finances to know your real ability to pay
After researching the best Payday Loan options, it is time to organize your finances to find out what your real payment capacity is. After all, there is no point in getting a loan and, in the future, not being able to pay the installments to pay it off. So put all of your fixed and estimated income and expenses on paper and consider what amount you could have monthly to repay the loan without being in the red. Ideally, the amount to pay debts should be at least 15% of the net income, and not exceed 30% of what you receive each month.
Be careful of scams
When looking for a Payday Loan, you will surely come across offers that, at first glance, seem incredible, offering money without bureaucracy, interest below the market and other benefits that are too good to be true. The point is that they are probably not true at all. When asking for a Payday Loan, double your care with scams and only borrow money from reputable and recognized institutions in the market.
Control your spending
Payday Loans can be the best way to pay off debts and clear your name, however, to have a truly balanced financial life, making spending control a habit is necessary. Manage everything that comes in and, especially, what comes out of your accounts, and put your foot on the brake if you’re spending more than you earn. That is the key to a healthy financial life.
Using a Payday Loan may be the solution you need to pay off your debts and get your financial life up to date. Follow our tips to avoid being bored and keep in mind that practicing spending control is the only way to keep your checking account out of the red and your finances balanced.