Payday loans UK are a great way to get some emergency funds for various purposes. On the other hand, there are certainly some things you shouldn’t spend it on because they’re not really emergencies. They include gifts, repaying friends/family, and vacations. Here are some other things you probably shouldn’t spend money from such short-term loans on:
1. Preventing pawning
It can be a tough decision whether or not you should pawn electronics, family heirlooms, etc. as a last resort. However, studies show that people who take out payday loans to avoid taking that step usually end up end up implementing the last resort anyway. The key is to find other sources of income that don’t involve loans.
2. Business investment
There’s nothing wrong with investing money in business, and in fact it can be a wise move. However, you probably shouldn’t spend emergency money from UK payday loans to fund them. The main reason is that business investments are usually long-term, while payday loans are the opposite. If you’re planning to invest in a particular business, you should probably consider getting the funds from a different source. For example, you could consider other types of loans besides pay day loans, or even wait until you have the cash to make the investment
3. Gambling/Casino
One of the main problems about gambling is that it’s often difficult to beat the house, and especially when playing games such as slot machines. However, even with that fact, it’s highly advisable not to take out short term loans such as pay-day loans in order to gamble money at the track, casino, etc. These are certainly not emergencies, and spending money for such items can result in you getting into debt, or adding more gambling debt to an existing one.
4. Paying off other payday loans
This can put you into a vicious cycle of debt. There’s nothing wrong with taking out a payday loan from time to time if you need some emergency cash. However, considering the rates can be quite high, you can get buried in debt if you take out another payday loan to pay off the first one. It’s better to find other ways to make your payments.
5. Avoiding overdraft fees
You certainly should try to avoid overdraft fees, and similar types of fees/penalties. However, you should also keep in mind that the cost of such fees is relatively small compared to the highest interest rates charged for payday loans.
You can save a small fortune by simply taking other fees to avoid paying overdraft fees. In particular, look for ones that will charge lower interest rates. Paying high rates for somewhat low fees isn’t a good move, and can result in you digging yourself a pit of debt.
One of the best steps to take is to avoid needing to pay overdraft fees to begin with. If you’re having financial problems it can be tough. However, by doing your homework you can likely find ways to prevent not spending more money than you actually have, and thus avoid potentially major debt.
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