Payday loans are notorious for coming with high-interest rates. This can get some people in trouble since, by the time the payback date comes around, they may not be able to afford to pay the loan off. That does not mean, however, that payday loans are always a bad idea. You can use this type of loan responsibly — you just need to follow the tips below.

1. Only take out the loan for things you need

Since payday loans do come with high-interest rates, you really want to reserve these loans for things you really need. You don't, for example, want to take out a loan to buy a new wardrobe or concert tickets. Only borrow for things that are essentials, such as rent, food, and bills that can't wait. If an expense can wait until you get your next paycheck, then wait rather than taking out a loan.

2. Know what you'll owe before you borrow

Make sure you establish exactly how much you will owe on the loan when it comes due. Don't just look at the APR or the origination fee. Take the time to calculate the exact amount you will owe. (Your lender should be able to give you this amount too.) Make sure this is an amount you'll be able to afford to pay back. If it is not, you may need to shop around for a loan with a lower interest rate or try to get away with borrowing a little less.

3. Borrow from an established lender

Do take your time to check into a particular lender before you borrow from them. Read some reviews online, or see if you know anyone who has borrowed from this lender before. Avoid borrowing from lenders who don't have good reviews, or who have not been in business very long. 

4. Work on cutting expenses in the meantime

You want to ensure that when your payday loan comes due, you can pay it. So the moment you take out that loan, you should start working on reducing your expenses so that you can afford the payment. Stop eating out, cancel some subscriptions you don't use, and be smarter with your utility use.

Payday loans have high-interest rates, but they do serve an important function and can work for you, as long as you follow the tips above to use the loan wisely. Talk to a money lender to learn more.