Do you turn to the best direct payday loan lenders because you are comfortable being in debt? Most people are in debt due to overused credit cards. Is the minimum amount a comfortable enough expense to justify new debt? When you only make the minimum payment each month, do you worry about how much interest eats at your paycheck? Do you ever think about what your finances might look like if you didn’t carry these extra payments? If the debt is not a necessary expense, why have it scheduled in your budget for so long?
Direct payday loan lenders don’t hide their high-interest rates.
Many people avoid using short-term loans for the fact that direct payday lenders charge high interest. The cost is a bit ‘in your face’ when an interest fee is attached to the payoff. Since this debt is supposed to be paid off in just a few weeks, the lenders must collect their revenue quickly. Because the loans have half the term limit as credit cards, it can become a very costly debt if not paid off on time. Interest never goes unnoticed when it comes to short-term loans.
Credit cards will usually carry much lower rates with monthly terms, and the revolving credit line will remain open as long as you are good at making the monthly payments on time. Pay down your debt and have that much more available to spend. Give the creditor a reason to raise your rates and not only will the creditor jump on the opportunity, but the interest rate will skyrocket to short-term loan numbers or even higher. For example, even one late payment could change your debt drastically. If you go from an 11.9% interest rate to a 29.99% rate on your current balance, your minimum balance will increase with the added interest charge. Responsible short-term loan lenders will at least keep the interest rates the same no matter what you do.
Can You Afford The Payoff
How comfortable do you get when your finances can no longer keep up with all the debt and unexpected or emergency costs? If your minimum credit card payments increase and the only way to get fast cash is by applying with payday loan direct lenders online, would you be able to continue making payments as well as pay off the short-term loan? Most often, at this point, comfort has flown out the window and financial stress is the replacement. Will you be able to afford the payoff?
Plan Your Budget Using The Worst Case Scenario
Honestly, answer the above question to make the best choices for your finances. Compare your monthly take-home income and all monthly expenses. Don’t forget to include any repeating quarterly or bi-yearly bills. In fact, take a look at the most expensive month in the last year. Use the worst case scenario to plan your monthly budget. If you prepare for the worst, the rest of the months will be smooth sailing. You may even find that doing so will alleviate the need for future direct payday loans. While you are at it, you can focus on paying off some of that debt that was comfortable.
Credit card companies want you to relax with their debt. It is their strategic way of keeping you on board while carrying balances from month to month. Because their interest does not usually have the same shock value as a short-term loan, people feel good that they are making smart financial choices. It isn’t until the debt becomes tiresome that many people begin to calculate how much they waste their income paying fees month after month.
Change your financial mindset. Treat credit cards as you would direct payday lenders, pay the debt off as fast as possible and become comfortable with putting money in a savings account for emergencies.