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A payday loan can be a lifesaver in times of financial crunch. This article will look into the top 10 use cases for a payday loan.
Life is full of uncertainty. There is nothing you can predict in life, and there are situations when you think to yourself if your bad patch of luck will ever end. Now, we can’t help you in every aspect of your life, but in today’s article, we will discuss the tricks of dealing with your financial problems and how to deal with them using a payday loan.
What is a payday loan?
Payday loans are quick short-term loans that you have to repay when you get your next paycheck. This is usually two to four weeks after the loan was taken out, and payday loans have a small limit and do not require credit checks or collateral. They are easy to get approved and usually take around an hour to get the money into your account ( given that your employment can be verified). Payday loans also have very few requirements. All you need is a banking account and proof of work.
Use Cases for a Payday loan
One of the top use cases of a payday loan is due to medical emergencies. There are some medical expenses you cannot predict. From an unforeseen accident to a relative getting sick all of a sudden, you will need quick cash to get treatment, especially if you do not have insurance. Coronavirus has also shown how medical emergencies can have a long-lasting impact on your finances. First, you need money for medical care. Next, you will not be able to work during these days, so that will have additional stress on your finances. This can be a very challenging time mentally and physically, so a quick Payday loan can be a great option. You can pay off your expenses and have the time to recover and get well.
A payday loan can also be a good option when you welcome your child into this world. There are a lot of unforeseen expenses that only new parents will encounter. So this loan can help them during these times as well.
Cover Holiday expense
The holiday season can be pretty challenging and stressful for your finances. Everyone expects a lovely gift, and it is time to spend time with family. It is not that you don’t have money. It’s that you may not have it laying around all at once. Again, in such cases, Payday loans can be a good alternative as they guarantee you cash during holiday seasons such as Christmas.
Bad credit score
We all know how missing just one credit card payment can negatively affect your credit score, even if it was by mistake. A bad credit score is a nightmare as you will automatically not be eligible for any loan, or it will be challenging to get a loan approved. Payday loans can be a great alternative to getting loans approved with a bad credit score as online lenders do not check your credit score. Furthermore, you can improve your credit score if you clear your payday loans on time, making it a handy trick to improve your credit score.
Avoiding Overdraft Fees
Bank overdraft fees are charged if you make a payment that is currently not available at your account. As part of an overdraft protection program, banks will help you cover the difference with an overdraft charge. These fees are often avoidable if you take a payday loan which is usually more convenient.
For Mortgage Repayments
While many argue if it is better to take a payday loan to repay mortgages or keep it unpaid to fall behind your mortgage, most think missing your mortgage is not a good idea, especially when you know you will have cash on hand on your next paycheck. For such a scenario, payday loans are a good alternative.
Taking a risk-free loan
Most lenders will ask for collateral before approving a loan. Many people, myself included, think it is a high-risk loan as failure to return the loan will put my property at stake. A payday loan can be a good alternative for that as it requires no collateral.
The number one reason for taking a payday loan is to save up in the long run by investing in something now. For example, you find yourself spending a great deal on coffee. How about you cut on that to buy a coffee machine at home? Or invest in some home improvement that will reduce your electricity bills for years to come. Such investment that will pay you off, in the long run, can be a great use case for a payday loan as you can save up on your monthly budget in this way.
Most people take payday loans for personal reasons, sometimes you can not comprehend the usefulness, but to you, it is important. An example is when I took out a payday loan to preorder the new PS5 when it came out. I was so excited to buy it but only found out that due to huge demands, the PS5 was sold out, and I can only pre-order the pro mode, so I took out a $500 payday loan and got the PS5 pro and repaid the loan from my next paycheck. This scenario I just explained sums up the perfect use case for a payday loan.
These are some of the very few use cases for a payday loan. Many people have a lot of misconceptions about payday loans. Some argue it has very high interest, and others say it is redundant and serves no purpose. These are all wrong; payday loans are meant for quick short-term loans, so you cannot substitute them with a long-term loan. People who argue that $500-1000 dollars won’t impact your finances are fortunate enough not to face a situation where you are left with no money, no friends or family to ask for money, and no banks are willing to give you any loan. In dire situations, payday loans can be a lifesaver. They can also be used smartly to save on late fees and overdraft charges. They are reasonably inexpensive as well. You only have to pay $10-$20 as interest for a 7-14 days period. If you think a payday loan is just the right loan for you, apply online today and get your loan approved within an hour.