One of the ways that payday loans have crept into the national conscience so quickly is the fact that they have been promoted with respect to the short term nature of these loans. While there will be people who are looking for a large sum of money when applying for a loan, there will be plenty of people that are keen to obtain a relatively small amount that can be paid off quickly. Taking out a large loan in these circumstances would be a bad decision.

Only borrow what you need

You should only look to borrow what you need, because this will ensure that you pay back less and it should ensure that you are more likely to make the payment. Payday loans have been promoted as the loan that you take out in emergencies and pay back as soon as you get your next paycheque. On the surface, this is a great option and if you do get hit with an unexpected bill, you have an opportunity to get the finance you need and then pay it off as quickly as possible.

Of course, the high level of APR associated with payday loans means that while the short term nature of the loan is of benefit, the high amount of money that needs to be paid is not ideal. This is why payday loans should be avoided because the risk of defaulting on the loan is high. This will cost you more money and it will further harm your credit rating, which will cause you more problems in the long term. Just because a solution is aimed at the short term doesn’t mean that it always going to be the best option for people with short term financial issues.

A guarantor loan may be your best option

It is important to think about your options and it could be that a guarantor loan is the ideal option for you. You can find short term finance with guarantor loans, allowing you to make the best decision for your needs at a more affordable rate of pay. As someone is willing to vouch for you to the lending company, you will find that you will receive a more attractive rate of APR, which helps to keep the cost down.

This is in turn should help to minimise the risks involved with the loan, allowing you to pay it off in no time. This solves your immediate financial problem but it also helps to build your credit rating, which will hopefully help you to have more financial options in the future.