Payday Loans

Payday Loans – A Convenient Solution to Money Problems

It happens to all of us from time to time. There are still days or even weeks to go until the next payday arrives, and yet your bank account balance is worryingly low. If the situation is not too serious, it can be possible to get through it by tightening your belt, only spending money on the bare necessities, and waiting for that happy day when your next wage arrives.

Unfortunately this approach isn’t always possible, and there are times when there simply isn’t enough money to get through the rest of the month, whether this is because of an unexpected bill or other expense, or just that you misjudged how much you were spending and have been left too short of cash to afford even the essentials. In these cases, a more proactive solution is required, and it is here that convenient payday loans can come into their own.

Before going any further, there’s one important point to make: payday loans have gained a reputation for being an expensive form of finance. In some ways this is true – certainly, the interest rates quoted can look high compared to other types of loan, but there are two things to bear in mind when viewing the APR figure. Firstly, payday loans are borrowed over a period of only a week or two, and the APR figure is calculated assuming you take out the loan over a full year. This drastically increases the percentage figure shown, when the actual cost is a lot lower when the short term nature of the loan is taken into account. Secondly, payday loans are fast to arrange and have a high approval rate, and this level of convenience is going to be a little more expensive – you get what you pay for.

So, while it’s true that payday loans are at the pricier end of the finance scale, there are times when for many people this is a price well worth paying. What are some examples of these situations?

– You’ve run out of money a week before your next wage arrives. You can’t afford to pay for petrol to drive to work, or pay for your bus or train fares. Getting in to work is obviously a top priority, and a fast payday loan provides a convenient solution.

– Although you’ve budgeted correctly for the month, you’re hit with a sudden expense that you can’t ignore. Maybe your heating system has failed in the depths of winter. Maybe your car needs an urgent repair that’s preventing you from getting in to work without expensive and inconvenient public transport. Problems like these need to be solved quickly, and the price of a payday loan can be worth paying when the money is transferred quickly into your account to provide immediate relief.

– You need a small amount of money to cover essential costs for a week or so, and don’t want to open up potentially large sources of debt such as a credit card or a bank overdraft. A payday loan allows you to borrow only the amount you need, which you can then pay back without risking being tempted to use the credit line again in the future.

No one would disagree that payday advances cost a little more than other kinds of finance, but in situations where you need extra cash quickly without the complications of taking out a large bank loan or credit card, then a payday loan can be an effective and convenient solution to your immediate money problems.