If you are a little short of cash you may be giving some thought at the moment to applying for a payday loan to help tide you over. If that is the case there are a few important points you should bear in mind before you commit.

First, you need to ask yourself if a payday loan is really the right thing for you. The interest rates are high and the charges can be punitive – there are many people who have been left ruing the day the ever decided that a payday advance was the solution to their problems.

To make sure this does not happen to you, here are some things you might want to consider:

Will you be able to repay the loan on time?

Payday loans have a reputation for being one of the most expensive forms of finance available. You cannot really argue with this assertion when you consider that the annual intertest rate on these products is often over 1000%.

Before you decide to go for a payday loan it’s essential you are sure you will be able to paytyhe loan back at the end of the month. That way, your loan will be affordable. If you have to defer payment – known as a rollover – the charges quickly mount up.

Do you have access to funds anywhere else?

Because they are so expensive, payday loans should not necessarily be your first port of call if you need to access cash quickly. Perhaps you have a credit card that you could use for a cash advance. Another option might be to ask your bank for a personal loan or perhaps for a temporary overdraft. The only problem with these solutions is thatbanks generally take quite a bit of time to agree to any kind of credit facility and that may not suit you if you need access to the funding quickly. Also, banks have been very reluctant to lend recently, especially since the fallout from the credit crisis affected them so badly. Happily, it looks as if things are slowly changing in this regard, so your bank may be a viable option. In any event, it makes sense to examine all available opportunities before deciding to plump for a payday advance.

Are you dealing with a legitimate lender?

Unfortunately, among the payday lending sector there are a number of firms that do not operate to the highest of standards. Most, like Blue Sky Loans, (http://www.blueskyloans.co.uk) are completely fine, but as in most industries the firms that are not up to scratch tend to dominate the headlines, tarnishing the other viable businesses by association. Check that any payday lender you are considering is a proper, valid business. One of the great things about the internet is that you can check up on just about anyone or anything these days. See if you can uncover any reviews- good or bad – about the firm you are considering. The bottom line is if you are in any doubt, just look elsewhere.