Without access to payday loans, many people would have difficulty reacting quickly to financial emergencies. Getting a loan through normal banking channels takes time and plenty of paperwork. There are times when this is just not practical, such as in cases where you need a small amount of money to pay for an unexpected expense or an emergency.
Applying for quick payday loans is an easy process and means you can have the money in your account within 24 hours if you don’t have the time to apply for an overdraft or take out another type of loan. There will always be times when you need a quick, low-value loan.
You need a quick, low-value loan
If your car breaks down and you need it to get to work but you don’t have the money to fix it, you need money quickly. You don’t want to have to take out a loan where collateral is required or you have to go through a credit check. You simply want the cash in your bank account so you can get your car repaired. Payday loans are designed for this very reason.
The interest on a payday loan often pales in comparison to lost income from not having transport to get to work. If borrowers use a payday loan for the right reasons and know they can repay it in time, it can be beneficial.
You want to get a loan online
Online payday institutions allow you to do everything online today. They are usually available 24/7 so you can apply at any time when you’re faced with unexpected expenses. Online lending businesses have lower operating costs and a large percentage of loans are now generated online. First-time online loans can take as little as 15 minutes to arrange.
Since lenders have little knowledge about the creditworthiness of borrowers, they do charge higher interest rates for the risk they take. However, the high APR should not put off borrowers who only take the loan for a short time and pay it back in full on the required date.
You will also typically have access to a personal online account where you can log in and see your loan balance and repayment dates. Managing your loan online makes it easy to make earlier repayments if you have the money.
You don’t want restrictions on how you can use the money
Many loans require you to specify how you’re going to use the money but with a payday loan, this is not the case. Emergencies won’t wait and if your boiler needs replacing, you want to do it straight away without having to wait forever for a loan to be approved. It is strongly advised that you use a payday loan for emergencies and absolute life essentials rather than using it for holidays or expensive gadgets.
FCA regulations offer protection to you as a borrower, limiting the amount of fees and interest which you have to pay. Time constraints on payday loans can be difficult but if you act responsibly, you will use the money to repair your boiler and pay it back on time.
You’re hit with a medical emergency
If you have a medical emergency, you’re not insured and you don’t have savings, you could be in a very difficult situation. If you can’t afford to get treatment, a payday loan could be a reasonable solution.
Not getting medical treatment in time could mean suffering from further problems due to complications. For example, if you have a serious injury to a limb, you could end up losing it if you don’t receive treatment in time. This could have serious financial implications for your future and your ability to work. Make sure you only borrow what you need as borrowing more is not worth the high repayments.
When missed payment could be more expensive
In certain cases, a short-term loan could save you money when other forms of borrowing or missed payments are more expensive. If you are about to miss a credit card minimum payment and are in unauthorized overdraft, taking out a payday loan may save you money.
You could make the credit card payment and clear the overdraft by taking out a £100 loan and save yourself from high late payment fees and extra charges. This will only work for you if you are sure you can repay the loan by the end of its term.
Borrowing £100 won’t cost you more than £24 in interest over a month, thanks to Financial Conduct Authority regulations. The costs of an overdraft, on the other hand, can continue to mount up until you pay it off in full. The fees banks charge on even authorized overdrafts can push you into unauthorized borrowing with much higher charges.