When Should I Take Out a Payday Loan in South Africa?: A Quick GuideJul 11, 2019
You need to be very careful when you take out a payday loan. It may seem like an effective short-term solution for your immediate needs, but it can have long-term effects on your finances if you’re not careful. When you take out a payday loan, it’s usually advertised as a non-binding loan that you can pay off in two weeks. However, a payday loan is unlike other types of loans, as you will have to pay it off in one go. For example, to take out a loan, you may have to pay a significant amount of fees, which will act in place of the interest. However, if you can’t pay off the loan in two weeks, you will have to pay more fees to renew the terms, but you won’t get any more money for that extra amount you have to pay. If this cycle keeps happening, the fees will add up very quickly, which defeats the purpose of you taking out a loan in the first place.
If you’re thinking about taking out a payday loan, here are some signs that it’s the right decision for you:
- When you need a small sum of money that you can pay off quickly
If you’re in immediate need of a small amount of money to pay some bills or other expenses, a payday loan is a decent option. It will cover those expenses but keep in mind that it needs to be paid off within the two-week time frame to avoid additional fees.
- When you don’t have other financial options
Payday loans are common is because it’s extremely easy to qualify for one, as it’s usually a small and immediate loan that can be taken out quickly. You only need to have proof of income and a checking account to take out a payday loan. If you need cash quickly, but you don’t have any other options, it’s a viable option for you.
- When you don’t want to be tied down by a long-term loan
If you don’t want to tie yourself down to long-term debt, a payday loan is an acceptable alternative. Since the lending terms are usually quite short and don’t have any long-lasting bindings aside from the renewal fees, it can be a solution for your financial troubles.
- When you are in immediate need of money
We all find ourselves with severe financial problems at one point or another and we need all the help we can get to make sure that we can get through the tough times. However, if you need to take out a loan to solve your financial problems in the first place, it’s fair to assume that your credit scores probably don’t look so good. A payday loan can help avert an immediate crisis, but you need to make sure that you can pay it off in time or you will find yourself with a hefty overdraft.
If you’re looking to take out a payday loan in South Africa, Hoopla Loans is your best option. Get in touch with us today to see how we can help.