How Often Can I Take Out Payday Loans?

Payday loans are an attractive, easy, and hassle free way of getting money before the payment date of your salary is due. However, having said that - you probably don’t want to be taking one out each and every week or month.

Why? Because the expense of payday loans can soon mount up, and can very quickly result in a huge household expense. For this reason, it is almost always best to restrict yourself to using a payday loan only when it is absolutely necessary.

Payday Loans and Credit Reports

Obviously, taking out a payday loan and successfully paying it back will provide a boost to your credit score and provide an added bonus to your credit report.

it therefore makes sense if you use logic to think that if you were to take out a payday loan each and every week, and then successfully pay it off - you should have one of the highest credit scores in the country. This is not the case - for a number of reasons:

• Only 2 or 3 payday loans will create a tangible effect on your credit score
• After this, any additional payday loans will have nil effect
• 5 or more could have a negative effect on your score and report

As you can see, there is a linear progression which shows that for the first few payday loans that you take out - a positive benefit is gained. However, if you use the facility too often, it can actually have an opposite effect on your score.

Budgeting and Habit Breaking

If you have fallen in to the unfortunate habit of using a payday loan each and every time your salary is about to become due, maybe it is time for a rethink of your household finances. Why? Because the facility fees, interest charges, and application fees for payday loans are probably starting to eat in to your household wealth - and they could indeed be counterproductive to saving money in the long run.

If you think that you are unable to break the cycle of taking out payday loans each and every week or every few pay packages - consult the finance company that you are dealing with and possibly ask if they can give you a longer term solution.