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The Dangers of Instant Payday Loans
Instant payday loans are popular with many people. They are a way to bridge the gap between paydays and offer the best chance of gaining a loan even with bad credit. However, there are some dangers to these instant payday loans and you should always watch out for them.
The problem with instant payday loans is that they are designed for short term lending. This will mean that they are not for debt consolidation or to offer a way to pay off a credit card. To stop you from doing this, the interest rates can be exceptionally high; usually with an APR of between 1000 and 2000 percent. This could turn that L100 loan into thousands if you left it for the year.
By not paying back the loan on time, you will also do a lot of damage to your credit rating. Instant payday loans could help you because they will give you the chance to show that you can borrow money and pay it back. However, keeping it for a long period will show that you are not financially responsible; they will prove that you cannot even borrow money for a month, let alone make regular monthly repayments over the long term.
You will need to be extremely careful with this type of loan that you take out. Another way that you can damage your credit rating is if you take lots of them out in a short space of time. They are there if you need emergency money for a broken boiler and not just because you want to splash out for a month. They should not be used as a way to budget your monthly outgoings. Borrowing too much will make it look like you are rely too much on the instant payday loans and that you are financial unstable.
If you find that you are flying on the instant payday loans, you should start looking at different ways of budgeting. This can be difficult but it will help your credit rating in the long term. You should work out your incoming money and then find out how much you are paying out. If you really need more money to come in then look at other ways, such as a second job or even selling items that you no longer use. You could also look at websites that allow you to sell off your talents, such as if you are a photography or artists.
Instant payday loans offer a great option if you really do need that one-off loan to help you afford your car repair costs one month. However, you should not use them on a regular basis and search for other ways to budget. They will help your credit rating if they are used correctly but when you decide that you need them all of the time, you will find that they hurt it dramatically. Become responsible with your money and stop borrowing all of the instant payday loans that you can each month.