Payday Loans Online Direct Lenders Only Be Smart When Getting A Loan

07-Aug-2019 08:56 PM

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Can you be smart about getting a loan? Is there a way to keep money lenders from overcharging you? In the debt management industry we see people drowning in debt every day, but we can't tell you to avoid allbad credit payday loans lenders only. Credit is a valuable service as it makes buying a house or a car a possibility as you generally cannot afford to buy these things cash.

The first thing you have to keep in mind is exactly this: you cannot afford these things and credit makes it possible to acquire them. Therefore you should be careful not to equate what you can get credit for to what you can afford. All too often people fall into money lenders' trap. They want you to think you can afford so much more when you make use of their services.

In truth, every debt that you acquire means that you are paying interest for the loan and that you have less money available every month. People who have debt are also far less likely to be saving and investing their money. Debt attracts more debt! That is why so many South Africans become over indebted: their living expenses increase, they lose a part of their income or an emergency arises that they need money for quickly.

Learn from others' mistakes. Only get a direct lender payday loan bad credit when you absolutely need it and don't see loans as a solution to financial problems or borrowing money as a way to improve your life. This is dangerous, because people often feel they deserve more from life and look to money to buy more, but in truth, you only need a few things to live comfortably. Plus you'll have peace of mind that you are prepared for a rainy day because you are saving, you are prepared for your children's tertiary education and your retirement or being able to afford a payday advance without credit check if you really have to.

When you do have to apply for a loan, make sure to shop around first. Different financial institutions might have different approaches to credit lending. Some are more inclined to give unsecured loans that don't require collateral while others are fans of secured lending. The benefit of the first is that you don't need a house or a car to qualify. Unsecured loans usually have shorter repayment periods and higher interest rates because they are more of a risk to the lender, but they are less of a risk for you. Your best bet is looking at the interest rates, the repayment period and the size of the instalments they will be expecting from you.

A golden rule to avoiding the debt trap is avoiding credit card debt. The minimum monthly instalments on these are often so small that you will be paying back the debt for years, all the while the credit card company charges you interest. It's really not a cost-effective way to get credit unless you can pay back the entire amount that you used this month with your next pay check. Then the interest will be minimal and you won't have to go through the schlep of taking out a payday loan.

However, it takes discipline and most people don't feel like paying for last month's expenses with a large chunk of this month's salary. Credit cards should therefore only be used in emergencies and not as the rule. Avoid store accounts as well: you might feel like you are saving with the benefits they throw in, but people spend so much more when they know they won't feel the effect on their current salary. However, all these small debts add up and keep you from reaching financial goals and ultimately rob you of your financial freedom.

The state of debt in SA

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