Have you recently taken out a payday loan? Worried about how it will affect your finances?
Use these 8 tips from Quick Loans Express to avoid financial problems with payday loans.

Story Highlights:

  • What are online payday loans for?
  • Tips for avoiding financial problems with payday loans
  • Always be upfront with your lender
  • Only take out payday loans for short term needs
  • Ask yourself whether you really need it
  • Budget carefully
  • If possible, repay your loan early
  • Cut back on treats
  • Approach a free debt advisor

How Can I Avoid Debt Problems? Use Online Payday Loans Properly

Payday loans are designed to help people survive financially stressful times until their next paycheck. They’re best suited to emergencies where there is a sudden need for funds, such as car repairs, home repairs or fines. Thus, instant pay day loans help bridge the gap in your income, putting you back on track.

One of the big advantages of payday loans is how fast you can get the money in your account. Often, you’ll get the money you need within 24 hours, even if you have a poor credit history. Payday loans are flexible and upfront about their charges too. You can specify how much you want to borrow and for how long, and you’ll immediately see how much it will cost.

However, because of the high interest rates and charges associated with them, it’s easy to run into financial problems with payday loans. Often, the price of a loan can become unaffordable and affect your budget for months to come. This is especially true if you use these loans as a crutch to shore up your finances long-term. It’s important to be well armed with information on payday debt before choosing to use payday loans.

Here are some tips when dealing with even the best short term loans to ensure you don’t create financial problems for yourself. If you are already struggling with a payday loan financial problem, click here to learn the right and wrong way out of payday debt.

8 Tips to Avoid Financial Problems with Payday Loans:

1. Always Be Upfront With Your Lender

Sometimes you’ll take out an emergency loan to cover an urgent cost – like a car repair – only to face another crisis soon after. This series of unexpected expenses can pile up and prevent you from paying back the original loan. Although this situation can feel extremely overwhelming, don’t automatically default on your loan! Instead, the best advice is to ring up your lender, explain your situation, and discuss your options with them. In most cases, you’ll be able to work out a mutually agreeable repayment plan.

It’s critical not to bury your head in the sand. Most lenders are sympathetic to borrowers and genuinely wish to help their customers. Being open and honest about your financial situation allows lenders to find solutions and enables you to avoid wrecking your credit score. Get in touch with lenders as soon as you realise that you may not be able to pay them back by the due date. You have far more to gain than to lose.

2. Only Take Out Payday Loans For Short Term Needs

As we discussed, payday loans’ purpose is is to cover a short-term deficit in your finances due to an emergency. In these situations, borrowing money responsibly can be a true lifesaver. However, many borrowers use payday loans for other purposes. The most harmful way to use a payday loan is to cover a long-term gap in your personal finances. If your expenses are consistently higher than your income, then a payday loan won’t fix that – in fact, it could make matters worse. In addition to losing money every month, you’ll have to pay mounting interest payments to the lender. Unfortunately, this can lead to serious financial problems with payday loans.

The only way to successfully plug a hole in your monthly finances is to change your behaviour or increase your income. Scrutinise your budget to see whether you can cut your spending and look for other employment opportunities to increase your earnings. Consider asking for a raise or taking on a small side job to supplement your income. By cutting back on spending and boosting your income, you can fill the hole in your budget and finish the month in the black rather than red.

3. Don’t Get Stuck wit Debt Problems! Ask Yourself If You Really Need It

Payday loans can be an essential lifeline in times of need, but they’re not your only option. Before taking out a payday loan, consider whether you could borrow money from friends or family . Friends and family are often willing to lend money on looser terms than many market-based lenders, which will mean lower costs for you.

Furthermore, ask yourself if you really need to take out a loan. You should never use a loan to go on holiday, pay for a meal out with friends, or other “extras”. Loans are a serious financial commitment and should be reserved for pressing mandatory expenses like an emergency medical bill or urgent car repair.

Finally, scrutinise your monthly budget for any “extras” you could go without this month. Perhaps you could skip a social event, treat, or vacation. While these options aren’t palatable, they can help you avoid long-term financial problems with payday loans.

4. Budget Carefully Once You’ve Taken Out A Loan to Avoid Financial Problems

A payday loan can rescue your finances for the current month but have a knock-on effect in the following months. Therefore, it’s a good idea to carefully plan out your finances to ensure you can meet all your existing obligations, as well as the cost of the payday loan. Before you take out a payday loan, realistically assess how big a loan you can afford. You might be tempted to take out £1,000 for a shopping spree, but will you be able to pay it back in a month’s time with interest? Probably not.

5. If You Can, Pay Your Loan Back Early

If you don’t want to incur the full interest charges of a payday loan, try to repay the loan ahead of schedule. Many lenders allow you to pay them back ahead of time, saving money in the process. For example, if a payment from a client comes through quicker than you expected, you could use these funds to repay your loan early. You might be surprised at how much you can save by repaying a few weeks early. In addition to saving on interest, you will also have the weight of debt off your chest knowing you have repaid responsibly.

6. Cut Back On Treats

The best way to make sure that you have enough disposable income to pay back your loan the following month is to cut down on your extra spending today. Could you reduce the number of “treats” you buy at the grocery store? Maybe take the bus instead of the car and save on fuel costs? Could you go to the park for entertainment, instead of the movie theatre? All these small changes can add up and make a real difference to your finances.

7. Have a Reliable Source of Income

If you’re considering taking a payday loan, it’s best to be employed by a firm or have a very reliable income. Someone unemployed or a newly self-employed freelancer or entrepreneur will likely have an ebb and flow of income, with some better and worse months. However, loans are a real financial commitment that you need to be sure you can repay. Taking a loan when you have an unreliable income is unwise because you may hit a rough patch just when your repayment is due. Consequently, this can easily lead you down a slippery slope of repeated borrowing – one of the biggest causes of financial problems with payday debt.

8. Approach A Free Debt Problems Advisor

If you’re consistently having problems paying your bills, it might be worth contacting a debt advice service. These compassionate services, such as Citizens Advice, are designed to help people with severe financial problems work on their debt and repay their creditors. If you start working with a debt adviser, make sure to inform your lender straight away. Consulting an advice service shows lenders you’re trying to work out a repayment plan. Generally, this will dissuade them from using debt collectors, as they see you are sincerely trying to pay them back.

With these 8 practical tips, you should be able to stay out of financial problems with payday loans. When used responsibly, fast payday loans can be an excellent solution to a short term money problem. If you think a quick loan online is just what you need, you can apply now with Quick Loans Express.

Taylor Rose
Taylor has been an avid writer since her early school days. At 5, she was creating candy floss planets where heroic candy canes stood up to the evil Russel Sprout. Later, she was documenting historic events, and her writing was always appreciated by all who read it. After working as a program developer for many years, she traded her successful career to make a living out of her writing skills. Nowadays, Taylor helps the Quick Loans Express blog bring current and useful information to people looking for helpful financial advice online – hopefully with a fun twist!

The article "8 Tips To Avoid Financial Problems From Payday Loans" was last modified on

* Warning: Late repayments can cause you serious money problems. For help, go to moneyhelper.org.uk.