At some point, it happens to all of us. We get hit with a sudden array of unexpected expenses that happen to fall on the same timetable as the rest of our expected bills.
For the majority of us who don’t have generous, wealthy parents who we can lean on when such tough times hit, we’ll likely have to take out a loan.
On top of the already stressful situation of falling behind financially, now you have to choose from the seemingly overwhelming amount of loan options to choose from.
Payday loans, installment loans, collateral loans, or just throwing it on their credit cards are all options you’ve heard people going to in such circumstances. Still, you aren’t sure which is exactly right for you.
To help guide you towards making a sound decision in a difficult situation, this article discusses some great advantages of that first option, payday loans.
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Payday Loans are Short-term
As stressful as they can be at the time, the unexpected expenses life enjoys throwing our way usually aren’t massive, life-altering sums of money. Perhaps the car you use to get to work broke down and needs a fix. Or, maybe your kid took a spill on the bicycle and needs some stitches.
Sure, you need some financial help just to catch up with these unexpected expenses, but you don’t need that much money. That being so, you hate the thought of such a relatively small event forcing you into a situation where you must take out a loan and have a debt hanging over your head for the foreseeable future.
You just want to borrow the bit you need, work a bit extra, if able, get those expenses paid off, and be debt free.
The short-term nature of payday loans makes them a great fit for such a situation.
With a personal loan, you’ll often be looking at one or more years to get the loan paid off. One of the great advantages of payday loans, in contrast, is that they give you an opportunity to borrow the money you need, pay off your expenses, and then pay off your debt all in the time it takes to get your next paycheck.
This shorter time span means greater control and predictability too. It’s much more likely that something hindering your ability to pay off your debt will come up within the one or more year time span than in the short loan term of a payday loan.
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Payday Loans are Almost Always Accessible
Banking hours are predictable, the expenses life throws our way are not. Very often when a financial need arises in our lives, it doesn’t fall in between the hours of nine to five on weekdays.
Fortunately, many institutions offering payday loans do so online and so are available around the clock. Many of these institutions offering payday loans online will allow you to apply for and then see if you’ve been accepted for the loan all from your computer, 24/7.
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You Don’t Need Great, Or Even Good Credit to Get a Payday Loan
When it comes to traditional bank loans, a less-than-average credit score can easily ruin your chances of borrowing money when you need it. This can happen even if you can prove that you have a steady, sufficient income to pay the loan with.
This isn’t the case when it comes to payday loans. Another great benefit of this type of loan is that it comes with few requirements, and having great credit isn’t one of them.
The long-term nature of a traditional bank loan means the bank wants to know you have a reputation for being reliable over a long period of time. The short-term nature of payday loans, however, means the lender will usually just want proof that you have a means to actually pay off the loan when it comes due.
Given that you’re 18 years of age or over, payday loan lenders will usually just require you to prove that you do have a stable income which will allow you to do this.
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Payday Loans are Flexible
Many types of loans are inflexible, fixed to a specific expense they are financing. Auto loans, student loans, home loans, and term loans for small businesses are all examples of these. This is sensible and even advantageous for these major purchases.
Yet, as mentioned at the outset, oftentimes when you need fast cash it’s because a variety of smaller, unexpected expenses hit. You can’t be tied to a loan financing just the payoff of a single one of these options.
This leads to one of the other excellent advantages payday loans offer. These loans are flexible, both in the actual amount you can borrow, and what you use the money for.
Use the money you borrowed to pay off your unexpected expenses. If it looks like you’ll be able to make out ahead after you’ve paid back the loan, use the remainder of the money to pay down a credit card.
Whether you go with online payday lenders or a brick and mortar institution, they’re not going to govern how you use the money borrowed.
Just Because You Need Fast Cash Doesn’t Mean You Need to Make a Rash Decision
As we can see, payday loans come with several benefits. Still, depending on your specific circumstances, these may not be the right type of loan for you. That’s why it’s best to compare the above benefits with the specifics of your personal financial situation.
Not sure if whether or not your situation necessitates taking out a loan at all? Perhaps you do have the money to take care of an unexpected expense, but don’t quite like the thought of having to tap into your savings to take care of it.
Although there are plenty of reasons why taking out a loan is a poor decision for some, it could very well be a sound financial decision for many others. If you’re not sure which end of the spectrum you fall into, give this article a read to find out what some of the situations are in which a loan is probably right for you.
