You may have heard bad things about payday loans, but that’s from people that never had to use a payday loan for the right reason. These loans are just like any other financial tool. There are times when they are good, and there are times when you may have a better option.
When you hear that payday loans are too expensive, you should think about your other options. For example, you might have had your hours cut at work, making the paycheck you needed to pay rent smaller than you expected it to be. If you don’t pay your rent on time, you’ll have to pay a late fee and might get evicted. If you get evicted, you might lose your deposit and have legal costs to pay. Plus, you’ll have trouble finding a new apartment and will likely need to pay a large deposit. If that’s your alternative, the fee for a payday loan makes a lot more sense.
Payday loans are best when you have an important expense to cover right now and won’t be paid for another week or two. Another example – is a surprise car repair that you need to be able to get to work, keep getting paid, and not lose your job. Even though the payday loan fee is much higher than interest rates on other loans, like mortgages and car loans, paying the fee is much better than what could happen otherwise.
The trick to using a payday loan is being a responsible borrower. You don’t want to fall into a debt trap where you have to keep taking out loans to pay back your other loans. You should use a payday loan when it’s a true expense you can’t avoid and you don’t have cheaper options. If you follow this rule, you will be able to easily repay your loan and know that it was the right decision.
Another good thing about a payday loan is that you can get them fast with less hassle. A traditional loan might make you wait weeks for credit checks and still deny you. To get a payday loan, you just need to show that you’ll be getting paid soon. This makes them better than other loans that might claim to be cheaper but then won’t lend to you when you really need money.
The application process takes just minutes. Grab your paystub and head to a local lender or complete an online application. In-person loans will give you cash on the spot, and online loans will have the money in your bank account the next day. If you need cash from an online loan, you can always withdraw it from an ATM.