I’ve written about payday loans here before, and I highlighted easy ways to use payday loans responsibly. Today’s post will highlight the benefits of payday loans as there are some that may surprise you.
If you’re in a tight spot, are typically financially responsible (ie. You have the resolve to actually pay the loan back before interest or penalties kick in) and need money to cover a short-term deficit, payday loans could be a temporary solution to help you weather a financial storm.
The key is remembering that these are short-term loans, and they’re small sums that will help you avoid bounced check/late payment fees (you can read more about short-term loan options by clicking here). Payday loans should not be used repeatedly to cover shortages incurred from bad financial practices, nor should they be something you constantly rely on to get you from paycheck to paycheck.
Payday Loan Benefits
- Easy Application. To qualify for a payday loan, you need proof of income and a clean history of paying back any previous payday loans you’ve taken out.
- Fast Funds. Typically, the turnaround from application to money payout is less than 24 hours.
- 24/7 Opportunity. You don’t have to go to a payday loan shop or merchant–you can apply online at any time. Click here to learn more about same-day loans.
- Funding Limits. You cannot borrow more than what you bring home in your paycheck for any single loan.
- No credit check. This is key for those who are seriously struggling to manage their finances.
Have you ever used a payday loan before? Any tips or perks you’d list as well?
Photo credit: Chika
Jen
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I have to say that I'm glad that I've never felt the need to utilize one of these. I just hear so many negative things about them and about so many people getting into trouble with them. I believe it can be helpful…but as always you really have to be responsible about it.
My recent post More Sick People
Absolutely! If you're not careful/responsible, these things can be a disaster.
I have never sued a pay day loan but I have heard that if used responsibly, they can help you when you are in a bad spot. Hopefully, I will never know.
I'm in the same boat–I'd ideally never have to utilize this option, but I wouldn't be opposed to if my financial situation changed because I know I'm responsible enough to use a payday loan correctly.
A "typically financially responsible" person, in my opinion, should not be in a situation where they need a payday loan. You didn't discuss the costs involved with getting one, but from what I have heard they are typically quite steep. Also, you didn't talk about the payback period but I believe it is very short (less than a month, typically). With this sort of time frame, for the "typically financially responsible" person, it's far better to just use a credit card and pay off the balance in full the next month – with NO transaction costs.
You're absolutely correct! I think the appeal could be for those freak, unforeseen things that can wreak havoc on your finances. But I'd 100% never, ever advocate them if someone wasn't able to use them responsibly.