You’re looking for a short-term financial arrangement, and decide to give payday loans a try. But if you don’t do it right, you might be putting a lot at risk.

A payday loan seems like a good deal when you need quick cash.

It’s designed to assist you in case of emergency. And although most borrowers can’t really afford this, it’s allowed in so many American states that obviously financial institutions understand the need for it.

Such a short term loan can be a life saver, but only if you do it right. I’m all about smart financial decisions, thinking long-term, and being realistic about your current situation.

But when life throws at us something unexpected and cash is needed right now, there’s not much else we can do. The best is to make sure we avoid the most common payday loan mistakes and get out of this as safely as we can.

Here are some things to watch out for when taking a payday loan:

1. Know how payday loans work in your country.

Rules and regulations for loans vary from state to state. They are also different depending on the part of the world you’re in. So you need to get yourself familiar with how exactly this is handled in your place.

In Michigan, for instance, there are some pretty specific things to keep in mind.

2. Borrowing too much.

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Something you might easily do wrong is borrowing more than you actually need. It’s easy to fall into that trap, and that’s why you need to set some limits and write down a plan.

Calculate exactly how much you’ll need to handle the crisis. Even think about your plan for paying it back.

This will need to become a priority for the next few months in you want to keep other aspects of your life under control and not worsen your financial situation.

3. Using more than 1 lender.

Some people end up doing this in desperate times. It’s not just illegal, but also totally irresponsible as it leaves you with having to pay more than what you make each month. Exceeding your salary with such a sum of debt will lead to things you can’t imagine.

So stick to one lender. If you use payday loans Lexington, for instance, that would be enough to get you started and cover your short-term financial needs.

4. Not making repayment a priority.

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Most often borrowers feel comfort once a loan is taken. It’s easy to borrow money you don’t have and put the next stage of this aside for some time.

You forget that there’s interest. But that doesn’t make it go away. You suddenly start spending on other things, life continues and you go back to your old routine. Until it’s time to start paying the payday loan and you simply can’t afford this.

That’s why one of the top payday loan tips is that you need a budget.

It will keep you focused on the next steps and you’ll always be aware of the amount of money you need to repay monthly.

You’ll plan how to spend the rest of your salary accordingly and thus will stay on track until the money is paid. After which, you can continue living normally.

5. It’s unsecured debt.

When things get complicated in life we stop assessing anything else that can go wrong and just use all our energy to fix what’s happening now. But that’s not a good long-term solution.

With any type of debt, for instance, you’re rarely guaranteed you’ll be safe if you go bankrupt, or somehow can’t afford to repay the loan.

That’s an awful thing to consider, but if you’re providing for your family it’s your responsibility to think about it in advance.

Look for alternatives, or worst case scenarios (even if it means borrowing more money from somewhere else to repay this, after which you’ll be left with the other amount to pay back).

Unsecured debt is a real thing in finance. Don’t underestimate it.

Here’s an infographic by LendUp sharing the most common pitfalls of payday loans and how to avoid them:

Loans are a serious matter, even the short-term ones. That’s why you need to give it all your attention, plan carefully, think things through, choose wisely when picking a lender and avoid the payday loan mistakes you just read about.