Due to a very high interest rate—generally 400% APR or more—taking out a payday loan can be a risky decision. In the case of an emergency, however, they can come in handy, and even save you from a disaster, such as losing your home.

While regularly relying on payday loans to get by is not recommended, sometimes it can't be avoided. As long as you read the terms of the loan carefully and are sure you will be able to pay it back as stated in the contract, you'll be able to move on from the financial upset unscathed. 

Here are some tips for using payday loans:

When to Get One 

If you're about to lose the roof over your head or the car that you drive to work everyday, consider taking advantage of a payday loan. Paying your rent or mortgage is an absolute must and if you hurt yourself and can't work, or if your hours were temporarily cut, you may be facing a financial meltdown. A loan can bridge the gap between paydays. 

It may be less expensive to get a cash advance off of your credit card, so check out that option first. You could also take out a small personal bank loan, but if you don't have good credit, that may not be a possibility. Most payday loan lenders don't check credit when processing your application, so even those with bad or no credit have a high chance of being approved. 

Other situations that warrant the use of a pay day loan are sudden medical situations, such as broken bones or infections, overdue electric bills, and last-minute travel and transportation costs due to family emergencies. 

How to Prepare 

Gather all of the essential information prior to heading to a payday loan lender to save time. Most lenders require proof of income, such as pay stubs or bank account statements, checking and saving account information, and personal identification.

Bring a blank check as well, as some lenders will ask for the first loan payment—which they will hold until the due date—upfront. 

After the Approval 

If you apply in-store, you'll most likely find out if your application was approved or denied right away. After signing the contract, prepare to make a loan payment on your next pay date. Always pay early or on time to avoid extra fees in addition to the high interest rate.

Pay the loan off in advance if you can to reduce the amount of accruing interest. For more information, talk to a professional like Payday Express.