If you do an online search for quick cash loans that are approved almost instantly, you will find a plenty of sites that offer such loans. These types of loans are referred to as payday loans or installment loans. In general, these are short term unsecured loans that you can borrow from a week to three months. There’s another term for these loans: predatory loans.

These short term loans are very easy to obtain. The catch is that these come with sky high interest rates. The APR for a payday loans can be as high as 300 percent. The problem is, most people don’t realize how expensive these loans are when borrowing. The loan providers are careful enough to wrap up predatory loans in nice, convenient packages. If you borrow money in this way even once, you put yourself as serious risk for getting into a debt trap. You can borrow a short term loan easily enough, but if you can’t pay on time, you will have to borrow even more to pay back what you owe. This results in snowball effect where you are trapped in debt forever. So, it’s best to avoid short term loans at all costs. Here are some tips for doing that:

Have an Emergency Savings Fund

Most people take out so-called payday loans for very small amounts less than $1,000 typically for emergencies. For example, you may find yourself in a sudden need of cash to pay for emergency home repairs, a health bill, or anything else. You can avoid borrowing money in the first place by having savings. Make it a habit to save a small amount each month in case of an emergency in the future. Then you won’t have to suffer short term loan creditors.

Save Money for Lofty Goals

Do you have plans for buying a new boat, a vacation home, or a new gadget? It’s very easy to take a small short term loan and hopefully may monthly installments. But you will also be paying extraordinary interest rates that you might not be able to afford. You can save yourself a lot of money buy saving for ambitious goals. If you want to buy a $1,000 smartphone, start saving for several months.  With the interest you get on deposits, you will be making more money, not losing more.

Borrow from Friends or Family

If you are suddenly in need of some cash, ask friends or family for help before seeking out predatory lenders. You can borrow without paying an interest rate, so you will not be at a risk of getting into a debt trap.

Get a Loan from a Local Credit Union

Most banks do not provide small loans for things like accidents. However, local credit unions might. If you need to borrow a lot of cash in a hurry, request it from the credit union in your area. You will get a decent interest rate that will not victimize you.

Last but not least, the best way to avoid short term loans is to budget for everything, including emergencies. Have a household budget and monitor it regularly for possible financial waste. If you are spending money unnecessarily, save it in the bank instead. Then you will always have money at hand if an emergency arises.