We all try to be responsible with our money. We save a certain amount from each paycheck, we budget, and coupon. But sometimes there are situations beyond our control. The car breaks down, or a loved one gets sick. The unexpected always happens at the worst time. It can make you feel like you’re drowning. An option for a lifeline could come in the form of same day payday loans.
Unlike loans from a bank, these require no collateral or security deposits. Your job is your collateral. A traditional loan sometimes takes weeks to be approved. By that time, you’ve already lost money. A payday loan gets money into your account the same day, usually within an hour. This sort of help can be invaluable in times of crisis.
There are certain things to consider before deciding if a payday loan is right for your situation.
1. The interest rates are higher.
Since these loans are unsecured, you will have to deal with a higher APR. These interest rates can sometimes be 100 times more than what you would pay at a bank. It is important to know you’ll be able to repay this loan as quickly as possible. Most payday lenders require you to repay the loan by your next paycheck. May sure you are able to do that. It wouldn’t be prudent to take out $5,000 and wind up repaying $20,000 because of interest and late fees. Which leads to
2. Late fees are higher.
Lenders will charge between $15-$30 per day that a payment is late. If you find yourself in a bind and can’t make a payment, it’s imperative to contact your lender. Those fees will accumulate fast.
3. Don’t use this loan to pay off other debt.
It may be tempting to consolidate debt with a payday loan, but it is not fiscally sound. The interest rates would guarantee that you pay more in the long run. This type of loan should be used only for emergencies and easily repayable in a short amount of time.
Once you’ve decided that a payday loan is the way to go, all that’s left is applying. You should ensure that you live in the same country as the place from which you’re borrowing. You’ll need your bank account number, social security number, and proof of employment. One good thing about these types of loans is that your credit score doesn’t matter. However, it’s imperative to remember that defaulting on the loan will negatively impact that score.
Stay away from lenders who claim you can skip payments with no repercussions; their rates are bound to be through the roof. Don’t use this type of loan often. It is truly a great tool for emergencies, but shouldn’t be a crutch.
Money should never be something to overly worry about. If used correctly, payday loans can help ease that burden. Be smart, do your research, and pay back your loans on time. Make sure that you can feel good about the decisions you’re making.