Why payday lending can offer a solution to urgent bills
No matter how sensible we are with our cash, there are always occasions when money doesn’t stretch as far as you might like. Unexpected repairs, bills you forgot about and special occasions you didn’t prepare for, are all reasons why you might need to access credit quickly. If you don’t have any savings and your friends or family can’t help you out – you may need to try another avenue and this is where a payday loan can be useful. These are some reasons why payday lending can offer the perfect solution for urgent bills.
Cheaper than credit cards
It may be more cost effective to use a payday loan, than a credit card for your emergencies. If you manage to pay your loan back on time, you won’t have any further interest to pay and it can be more costly to use other means of funding. The good thing about payday loans is that the money is credited into your account, so you know where you are with it. This is different with credit cards, as it often doesn’t really feel like you are spending money!
Quick and easy
The application process for a payday loan is often a lot quicker and easier than for other types of credit. In general, you would receive your cash on the same day or at least within 24 hours, if there are no problems. If you need to make a payment quickly, or you have a special occasion and don’t want to worry about cash – this can be the perfect answer. An application for a payday loan should only take a few minutes to complete, which is a lot less hassle than for other means of credit. You usually don’t need to supply any other information, other than your income and bank details.
Higher acceptance rate
While other financial institutions will make you jump through hoops before you get credit, payday lending companies have a higher acceptance rate, with less focus on a perfect credit rating. If you have less than perfect credit and need access to urgent funds, this can be a better solution.
With many other loans or credit cards, you are required to tick a lot of boxes before you will get credit, but this isn’t the case with payday loans. If you are aged 18, have a current back account and you are in employment, you can quality for a payday loan. This lower acceptance criteria can make payday loans a much more feasible option.
It doesn’t really matter to the payday lender what you plan to spend the money on, you can take it out for all purposes. This is often not the case with other lenders, who require specific details on your intentions for the loan. This greater flexibility can make payday loans a more attractive open than other types of credit.
Although this is not an option to take lightly, you do have the option to extend your repayment date, if you need to. This is an option which is not usually offered with bank loans or credit cards. You either pay it on time – or you suffer with extra fees if you don’t. This means that if the worse happens and you really can’t afford to pay the loan back on your next pay day, you don’t have to stress too much about it. You can usually just roll it over until the next month, however, it is best if you can pay it back when it is due.
If you pay your payday loan back on time, you may be given access to higher amounts in the future. You will generally start off with a small loan, but this can increase if you need to return to your payday lender in the future. This type of trust and loyalty is not something which is usually present with other means of credit.
Improve credit rating
If you have no credit rating or a poor score and need to make improvements, a payday loan can be a good way to do it. As long as you make repayments on time, every month – your credit rating will start to increase. It can be a good way to start on your financial journey – as long as you are sensible and don’t keep extending your loan.