If you’re in a bind and need some cash, you can turn to your local payday loan store. Payday loans are widely available especially with the growing technology in the financial world. Like other types of loans such as credit card debt or student loans, they come at a cost, sometimes quite high. On the other hand, they offer an alternative for people who don’t have anything saved up or the credit to get other types of loans.
Read on for five reasons why people turn to payday loans when in a pinch.
Reason #1: Being Made Redundant.
People who have been made redundant often turn to payday loans for a quick injection of cash, especially if they have no savings. Redundancy payments are often withheld until the redundancy period has ended and there is usually nowhere else to turn to get hold of some extra money. Payday loans allow you to borrow from next week’s wages so that you can get by until you find a new job.
Reason #2: Loan for Debt Consolidation.
One of the biggest reasons why people take payday loans is to consolidate their debt. Instead of having multiple monthly loan repayments to various lenders, it can be easier to have one or two larger ones. The problem with this is that the interest rates are usually much higher for these types of loans.
Payday loans can be a good way to get the debt under control and start creating a budget to pay off your payday loan at a lower rate.
Reason #3: Avoiding Asking Friends and Relatives.
Many people are far too embarrassed to admit to their friends and family that they need money. This can lead them to take out a payday loan in order to tide themselves over until payday when they can repay the loan back.
Lenders don’t usually care who you borrow from, as long as you have income coming in which means you are likely to repay them.
Reason #4: Holiday Loans.
If you are planning a holiday, it can be hard to save up all of the money that you need for this. Payday loans are an attractive option because they only take a few minutes to apply for. You can then have access to your cash within 24 hours which means that you don’t have to put off your holiday plans for long.
Payday loans are structured so that your repayments are taken directly from your bank account, usually on the same day each month. This can make it easy to budget for them and they shouldn’t put too much strain on your finances.
Reason #5: Payday Loans for Bad Credit.
Bad credit payday loans are an increasingly popular option for people that find it hard to borrow money due to having a poor credit history or no credit history at all. People with questionable credit can pass easily the payday loan eligibility check and can get it with surprisingly good terms.
As long as you have proof of income and a bank account, most lenders will happily lend to you.
If you are planning to take out a payday loan, do your research first. Look for the best deal and understand what the charges will be if you can’t repay on time.
Payday loans should just be used as an emergency option when you absolutely need extra money quickly. They aren’t designed to help people with long-term debt problems. If you have resorted to taking out payday loans, it may be time to rethink your whole financial strategy and start paying off any debts that you have as soon as possible.
Although many people use payday loans to help them through a tough period, it is important to be aware of the large interest rates and fees that you will need to pay. This can mean that you quickly start racking up an unmanageable debt level which could seriously affect your ability to get credit in the future. If you are struggling to repay a payday loan, contact your lender as soon as possible.
To sum it all up
Using payday loans can be very helpful in some cases, but also not that smart if they are used too often. The most important things to remember are: – avoid using payday loans as a solution for your debt problems unless it is an emergency; – always check the fees and interest rates that you will need to pay before taking out the loan.
Remember to use the money only when you really need it and don’t ever take out more than you can pay back on time!