Payday loans are typically offered to people who need cash quickly. The way a typical payday loan works is that you will give the lender your bank information and a pay stub and they will expect you to pay them back each time you receive a paycheck until the payday loan is fully paid off. It's true that payday loans can have higher interest rates than more traditional loans, but there are still some situations where getting a payday loan might be the best or only option for you. Here are some scenarios where it might be worth moving forward with a payday loan.
Help During an Emergency
Your car has suddenly broken down and you don't have an emergency fund to pay the repair bill. You have suddenly encountered some medical expenses and you need to get the care you need so your body can feel right again. If you are going through an emergency and you are short on cash, it might be worth it to you to take on a payday loan to get through the situation because the emergency is more important to deal with than anything else. Take care of the emergency, come out on the other side and you'll feel whole again and ready to move forward with your life and the process of paying off the loan.
No Other Options for Loans
Do you currently have less than stellar credit? It could be difficult to get a loan from a traditional lender under some circumstances. If you are just coming out of bankruptcy or if you have missed payments on your credit report, you may need to find a lender who is more lenient with their requirements for giving out loans. With a payday loan company, it's possible that all you might need is a recent pay stub to prove that you are getting paid on a regular basis. In some cases, the payday lender might not pull your full credit report at all. If you don't currently have a ton of other options for getting the money you need right now, a payday loan lender can help you out even when no one else can.
You Might Reduce Interest With a Quick Repayment
Yes, payday loans can have higher interest rates but you should read the fine print. In some cases, it may be possible to make extra payments on the principal of the loan. Doing this may allow you to pay the loan down faster and save a significant amount of money by reducing your interest paid. If you only need someone to spot you some cash right now and you know you'll be financially OK again in the near future, you could go into your loan with the intent of paying it off quickly and then it will seem like a much better deal from a financial standpoint.