Payday Loans can be a life saver for some people and for others can turn into a nightmare. It’s about how and when to use them. Usually it’s a last resort to turn to payday loans when money is running tight and you have no other means. This blog is mainly about money saving, but I think it would also be a good idea to share my view point on the lending side in case there are people out there who are cash strapped, who might be reading this blog and are unsure whether to use a payday loan to help them or not.
I’m sure by now you’ve all heard about payday loans; we’ve seen the adverts everywhere and maybe thought to yourself, why anyone would want to take out one of those when they have such huge interest rates!! I agree with you until you start to think about the situation people might be in, with no other options available to them. Often people will need access to money ASAP and are not able to get the cash they need quickly. Payday loans are flexible and offer loans in 15 minutes in most cases. Some reasons why they would need cash so quickly could be to pay for things like boiler breakdown, emergency car repairs, got rent to pay and simply cannot afford it this month.
The high interest rates can put you off even thinking about applying for a cash loan online. Some lenders charging as high as 4000% APR. It does seem ridiculous. You have to remember that this is the rate per annum. You will only ever take out a loan for up to 1 month, so the charges will be pro-rated. It’s often best to look at the amount of interest charges you will end up paying back. As long as you feel comfortable with this and feel you can pay this back next month then it could be the solution for you. However if can turn into your worst enemy if you aren’t able to pay it back because the interest will creep up on you. These loans are so easily accessible that it can be so easy cause you to spiral into debt. Much like credit cards can be.
So why not get a credit card then. This is certainly a better option in some cases providing you can wait up to a couple of weeks. It can take a while to apply and also seems to take a long time before you get accepted and are able to use the card. You can also use your overdraft facility if you have one but make sure to check the charges. Some banks charge daily fees so this can often work out more expensive that what a payday loan works out to cost you. It’s just that banks do not show the interest amount on these fees as they are fixed.
Getting a credit card or using your overdraft facility can be alternate solutions, however not always readily available to everyone. Usually you have to have a good track record and a good credit score. Maybe you are currently not employed and are unable to borrow off your family, so the only option is loans for the unemployed.
So if you find yourself struggling with no alternative, then a payday loan could be the only solution for you. Just remember to pay it back as quickly as possible. Consider cancelling your subscriptions to those ‘luxury items’ and also maybe eat beans on toast for a while. Take back any recent clothes you may have brought, consider walking to places instead of using the car. Do all you can to cut back until your finances are sorted.