When Online Payday Loans Make Financial Sense
There is a lot of discussion going on regarding payday loans and whether they are the best way to solve short term financial problems. It is understandable that some people are worried about taking out another loan when they are already in financial difficulty. But the truth is that in some circumstances taking out a payday loan is better than the alternative. Below is an explanation of some of these situations.
What is a payday loan? Before considering the different circumstances, it is important to clarify the facts regarding payday loans. Payday loans online are short term loans that you can get for amounts ranging from a hundred to a few thousand dollars. If you choose to get payday loans online, you won’t have to go through a credit check, but you will need to provide details about your job and your bank account.
Payday lenders don’t require you to have a credit check because they want these loans to remain viable for people who are in financial dire straits. But you have to bear the higher interest rate that results from not having checks. Since the lender has no idea your creditworthiness, they take on a greater risk, which is why some payday loans have an APR of 250% or 350%.
However, the high APR shouldn’t scare you if you don’t plan to hold on to the payday loan for very long. Those who are able to repay the loan within two or three weeks will not have to pay more than $ 15 to $ 30 on the average payday loan they take out.
It’s only when you take months to pay off a payday loan that you might have to pay hundreds of dollars in interest charges on a single loan. This is why you need to make sure that you are able to repay a personal loan quickly before taking one out.
Use a payday loan to repair your vehicle: One of the most common reasons people take out payday loans is because they are involved in a car accident. If you had an average insurance policy and were responsible for the accident, damage to your vehicle is not covered by your policy. Policies that lack collision and comprehensive coverage will not cover damage to your vehicle caused by an accident where you were at fault.
This means that you need to find the money for the repairs immediately. If you don’t have significant savings, it means you won’t have access to your car for days or weeks. A payday loan can help you in these circumstances. Rather than having to wait for your next paycheck to pay for the repairs, you can get a payday loan out of your bank account within 24 to 48 hours. You can then pay for the repairs and get back to work without missing more than two days.
Under these circumstances, the cost of the personal loan is much less than missing an extra three or four days of work. By doing your shifts on these days, you earn money to pay off the loan and meet your regular expenses in the weeks to come.
Delay in your paycheck: Although a delayed paycheck is not common, it can happen in certain circumstances. If you are starting a new job and enabling direct deposit, there may be a delay of two weeks for your first paycheck to arrive.
There might be a problem with your employers’ accounts and they must have delayed your paycheck for a week or two. This is not a common occurrence, but it is very problematic when it occurs. A payday loan can help you in these circumstances. You know you will be paid soon and you know the exact amount. The payday loan delays you until those days, but you don’t take any significant risk. You know you can pay off the loan in the coming weeks, which means minimal interest charges on the loan.
Find a reputable lender: When it comes to payday loans or any other loan, you need to make sure you find a reputable lender. Research the company to understand how it works and if other users have had bad experiences with taking out loans. Then you can determine if you are safe in your transaction.
Ultimately, payday loans are a good way for people with little or no credit to get the money they need. Payday loans are granted in a day or two, giving you a quick injection of cash that can be extremely helpful.