Four in five American workers live paycheck to paycheck.
If you’re among these people, you know there are days when your money will run out a couple of days before the next check hits your account. Perhaps an unexpected expense cropped up, effectively ruining your budget.
It’s during such days you appreciate the importance of having a rainy day fund. If you don’t have one, your option is to borrow.
Here’s where payday loans come in.
Although these loans typically carry exorbitant interest rates, there are instances when it’s advisable to use payday loan services.
Read on to learn more!
1. Get Money Fast
There are times when you need money – and you need it fast.
Maybe your car has broken down and you need to get it fixed else you won’t be able to commute to work. Or a close family member falls ill and you have to pay a hospital bill before they can access health care services.
Regardless of your situation, a payday loan is your only convenient chance of getting the money you need quickly.
Sure, you could approach your bank for a personal loan, but banks usually take their sweet time to review loan applications and disburse the money.
On the other hand, a reputable payday lender will disburse your money in a matter of hours – as long as you meet the requirements.
2. No Credit Score Worries
About 30 percent of all credit-active consumers in the United States have a bad credit score.
If your credit score is in the red, you have little to no chance of getting approved for a traditional bank loan. And even if you’re approved, the bank will slap you with high interest rates.
The good news? Payday loan services have no interest in your credit score. As long as you have an income and the amount you’re requesting is well within your means, your applications will likely sail through.
That said, bear in mind you can’t use a payday loan to build your credit. Most payday lenders don’t report your repayment history to credit rating agencies.
However, if your payday loan goes into default, your account could go to collections. If you still fail to pay up, the debt will show up on your report and worsen your score.
3. Use the Money for Any Purpose
When you go in for a loan, you want to be able to use the money however you wish.
Yet, this is might not be the case if the money is coming from a bank loan. It’s not uncommon for banks and other traditional lenders to ask about your reason for applying for a loan. Even though they may not follow through to ensure you’re using the money for the intended purpose, the fact that you had to state a reason can feel like an intrusion to your privacy.
Payday loan lenders have no such requirement.
When making your application, all you need to fill out is your personal and financial information. After approval, you’re free to spend the money for any purpose.
4. It Might Be Cheaper to Take Out a Payday Loan
Yes, payday loans cost upwards of 400 percent annual interest rate.
However, there are instances where it might be cheaper or financially savvier to pay the high interest.
Let’s say you have an auto loan, and you have missed a couple of payments. Unless you catch up with the late payments, you risk losing the car.
What do you do?
Watch your car get repossessed and lose a lot more money in the process or take out a payday loan and use the money to settle the auto loan? Your answer is as good as ours!
5. Easier to Manage Payday Debt
Every loan comes with a risk of default, but some are riskier than others.
When you take out an unsecured personal loan from a bank, for instance, it’s your obligation to make monthly repayments. If you have poor financial management skills, it’s easy to skimp on the payments and before you know it, you’re a couple of months late.
With payday debt, there’s no chance of missing your payments, because your lender will automatically deduct their money from your next paycheck. Unless you lose your job soon after securing a payday loan — so that you have no pay coming in – it’s impossible to fall behind on payday debt.
6. Who Likes Borrowing from Friends and Family?
When you’re in a financial fix and you can’t get a bank loan, another option is to borrow from friends and family.
But let’s face it: is there anything more humiliating than borrowing money from your kin? Well, it depends on the relationship you have with whoever you’re borrowing from, but for the most part, these loans aren’t a good idea.
Lucky for you, payday loans are there to save you from the unnecessary and potentially embarrassing task of borrowing from friends and family.
7. Greater Peace of Mind
When you live on paychecks, you’re also living on the razor-edge of financial uncertainty. Even a small emergency can leave you helpless.
It’s for the reason payday lending services are good for your peace of mind. Even if you never have to take out a payday loan, you’ll rest easy knowing there is a service you can run to for quick cash whenever a need arises.
Give Payday Loan Services a Try
Payday loan services might have a bad rap, but there’s more to them than meets the eye.
When you have bad credit, need money urgently, or don’t want to borrow from friends and family, a payday loan will come in handy. What’s more, there isn’t a shortage of reliable payday lenders.
Now that you know the reasons to use payday loan services, why not learn how to get one?