You should only consider a payday loan if you can afford to pay it back on time and be aware the cost of borrowing is higher when compared with other forms of credit.

Payday loans should only be used a last resort when you have exhausted possible alternatives. For instance if you are on a tight budget and an unexpected bill crops up, let the bank know your situation and see whether your authorised overdraft facility could be extended until your salary is paid or possibly borrow using a credit card. Both these forms of borrowing are likely to be considerably cheaper than a short term cash loan.

However for many people on low incomes or with a poor credit rating, the choice of borrowing options is very limited. Following the economic recession and credit crunch, many consumers have been cast adrift by mainstream lenders who have severely restricted their lending to individuals they regard as risky.

As a consequence payday loans have become popular for cash strapped consumers who are not able to borrow from a mainstream lender because of their status.

Payday loans are fine as a one-off if you are perhaps faced with the need for emergency cash to pay for an unexpected bill. They should never be used as a long term financial commitment and people turning to payday loans on a frequent basis need to appraise their spending. People who defer repayments and continue to borrow more cash will inevitably plunge deep into debt.