How a Payday Loan Turned My Life Around

Payday loans have a bad reputation because of their high interest rates and short repayment terms. However, there are many benefits to payday loans that people don’t talk about.

I recently applied for a payday loan, and it completely changed the way I look at my finances and my life as a whole. The key to avoiding financial pitfalls is to thoroughly research payday loans online, ensuring the lender is FCA-certified, has positive reviews, and provides clear contact details.

A genuine lender doesn’t set out to rob you of your hard-earned money but to assist you during a financial emergency. With proper financial literacy and budgeting, payday loans can actually be a boon instead of a bane.

But don’t just take my word for it. Let me walk you through my experience with payday loans.

I Needed Money ASAP

I was working in Central London while my parents lived in Hammersmith, about a 42-minute drive from my office. To make life easier, I decided to rent closer to my office and visit home on weekends. Everything was going smoothly until my dad had an accident and needed surgery. My mum, who is also in her 60s, struggled to care for him on her own, so I stepped in to help.

Suddenly, a few days later, I received an urgent email from my manager asking me to come into the office three days a week to meet some tight deadlines. This meant driving back and forth between home and work until my car broke down, costing £250 to repair.

Since I work night shifts, taking the train wasn’t an option, and with all the medical expenses, my savings had already taken a hit. To make matters worse, payday was still two weeks away, leaving me in a difficult financial situation.

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Quick Solution For Someone With A Poor Credit Score

I had two options: pay with cash or use a credit card. That’s where I dealt with my next challenge—low credit. I had never taken out any credit because I believed it was a bad financial decision. Without any loans or credit cards in my name, my credit score was low, which meant I couldn’t qualify for an emergency credit card when I needed it most.

That’s when a friend suggested looking into payday loans. Like many people, I was wary of the risks involved, but I was in urgent need of money. After much deliberation and some research, I finally found a credible payday lender who was willing to pay me the amount I required.

To my relief, the entire process was quick and straightforward. My application was processed and the money was deposited into my account in less than twenty-four hours.

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Avoiding the Debt Trap

Here’s what I did differently that has helped me steer clear of the bad debt cycle of payday loans. The next month, as soon as my salary was credited, I paid back the entire amount due. I had to cut back on nonessentials spending, but at least I could rest easy.

This step is where most people fail; they either keep pushing for repayment or put other needs ahead of debt repayment. The right thing to do is to borrow only the amount that you need and then pay it back at the earliest.

It was tempting to borrow more than was required; the lending platform was willing to extend me a larger sum. However, it’s important to note that borrowing more means you need to return more, and if your current income and expenses don’t have provisions for it, then you should abstain from it.

Lesson Learnt From Borrowing

Here are some things I learned from taking out a payday loan:

• It’s important to build a credible credit history. I now use a credit card and diligently pay it back on time; this has ensured that I have a good credit score. In case of a personal emergency, I have wider loan options available.
• Previously, my emergency fund was a meagre £100, which was depleted each month when I ran out of money. I now save 20% of my income towards my emergency funds and never use it unless there is a situation that qualifies as an actual emergency.
• I’ve become more aware of my spending habits and have started budgeting, and this has actually allowed me to save money while reducing wastage.
• I have understood the importance of financial literacy. If I had been aware of emergency funds and credit scores earlier, I wouldn’t have been in the sticky situation that I was. Researching lenders and borrowing terms is also essential because that saves you from getting scammed.

In Summary

I needed to take out one payday loan of £250 to understand the importance of money, financial planning, and borrowing options. Since my childhood, I was taught to be smart with money, and yet no one told me how.

Financial literacy is extremely important in the present economic conditions. If you’re not making the right choice, it’s easy to get sucked into a financial vortex that can leave you in debt and bankrupt. Payday loans, when utilised properly and paid back in time, can be an asset. Have you ever taken out a payday loan?

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