Everyone knows that payday loans come with high interest rates and demand a fast pay back of the borrowed amount. But there are a few reasons to use a payday loan that actually are worthwhile. Obviously people use payday loans for emergency expenses, but the key is using these loans in the smartest way possible.

Look At All Options

When you need money quickly a payday loan may seem like the only option you have but there are other choices. You can ask a friend or family member to lend you the money or get a cash advance from a credit card. Some banks offer small short term loans at a lower interest rate than payday loan lenders can offer.

Find a Good Lender

Be sure when you are looking for a payday loan that you look at a few different lenders and compare their interest rates and fees. This will avoid paying more in fees that you absolutely have to. You can find lenders in many ways such as online, in the phone book or by visiting one of the many locations throughout your town. Applying for an online payday loan is simple to do by answering a few easy questions and providing your checking account information to receive your money.

Avoid Lenders That Advertise on Television

These lenders frequently charge higher fees that they hide in the fine print and have been the recipients of many customer complaints regarding their lending practices. If you see an advertisement on television and are interested in the lender, be sure to check them out online and read all the information about their loans before making a decision.

Understand the Terms

Be sure to read the lender''s agreement before signing it to receive your money. These terms will include the fees and interest rates associated with the loan as well as how long you have to repay the loan and if there is a way to extend the loan. They will also state how you are to make your payment such as by check or money order or if they will automatically withdraw the payment from your checking account.

Only Borrow In An Emergency

Payday loans are there for emergency uses and if used in such an event they are extremely helpful. You should not use a payday loan to buy a new purse or take your girlfriend out on a date. You can use a payday loan if you need to get your car fixed or are short on your electric bill as these bills are important and will be easy to repay.

Borrow Only What You Need

It may be tempting when the lender tells you that you qualify for well over what you absolutely need to take the extra money. Remember this money comes with fees and interest and those fees are based on the amount you borrow. Borrowing more now means repaying more later. Be sure you will be able to repay the full amount on the date that it is due to avoid additional fees.

Don''t Borrow More Than a Quarter of Your Income

To best avoid being in financial trouble at the time you have repay your loan, avoid borrowing more than one fourth of your monthly income. This will allow you to repay your loan while still being able to pay your current bills.

Apply Unused Amount Toward Repayment

Occasionally you will borrow slightly over what you thought you needed to pay for repairs or bills. In this case be sure to keep that money to put towards the repayment of the full loan. This can make it easier to repay the loan when it is time.

Repay the Loans Quickly

The faster you can repay the amount you have borrowed the less you will be charged in fees. It is important that you are able to repay the loan on the date due as many lenders will charge additional fees on any amount that must be rolled over into the next repayment cycle. Also keep in mind that the interest is continually added to your loan balance.

Don''t Borrow Frequently

If you find yourself constantly in a financial bind, it may be time to address the underlying cause to avoid continuing the cycle of borrowing and repaying loans. You may need to cut out unnecessary expenses or pick up a second job to afford the things you want.

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