Payday loans are usually used for generic cash-flow issues between paycheques, right? We have covered some other uses of this short term financing option, such as emergencies, leveraging sale prices on big items and such. But there are some situations we’d never condone using a payday loan for.
While a payday loan lender can never ask you what you intend to use your money for, we hope these suggestions of what to avoid heed a good warning to prevent any financial suffering in the future.
As Your Main “Income”
A mistake we often see is when a borrower depends on the advance of their own pay to meet most, if not all, of their financial obligations. It’s one thing to use a payday loan once a month, but having your hand on the re-loan button every time might not be the smartest move for your chequebook.
Budget whether or not you can afford the fees of re-loaning every pay period. If you can’t, continuing to re-loan before you’re ready can hurt you more than it can help you. Again, we can’t ask you why you’re borrowing, but we can urge you to think twice. At the very least, borrow a little less.
To Pay Off Another Payday Loan
We can’t speak for other companies, but if you have a payday loan out with someone else, we view it as a dangerous situation for you and may not loan to you. It’s not responsible lending if we do, after-all. While we want to be here to help cover minor cash-flow shortages, we don’t want our customers stuck in cycles of debt. If you need to resort to one payday loan to pay off another, then perhaps consider getting some outside financial counselling.
For Entertainment & Novelties
Let’s be totally frank about this one: It’s one thing to need a little extra cash because you had some unexpected house-guests drop by. Or perhaps you wanted to get something special for a loved one for their birthday beyond what you budgeted for. It’s something radically different to use your own money (after-all, this is just an advance on your own pay) to pay for “extras” you just want. If you have every single thing you need taken care of and all your bills are paid, using a payday loan just to add to your closet, your garage or whatever it is ends up bordering on a bit of greed. Ask yourself if you really need it, or if it can wait until payday.