Is a Payday Loan only for Emergencies?
Many people know that a payday loan can be organised quickly and is therefore a good loan to turn to in an emergency. However, it might be thought that this is the only circumstance that they are good for. This is not the case though as they have other features that might appeal to borrowers and make it their loan of choice.
No credit check
The fact that payday lenders do no credit check can be appealing to many people. If you have a poor credit rating then it is unlikely that you will be able to get a loan elsewhere or if you do then you could be offered a very uncompetitive interest rate. This means that you may feel that a payday loan will be a better option for you. It is certainly worth considering if you are in a situation where you feel that you need to borrow some money and are worried that your credit rating will prevent you form getting anything else. Just the act of applying for loans and being turned down effects your credit record and so by applying for a payday loan, where there is a really big chance that you will get accepted, you can reduce the risk that your credit record will be negatively affected.
Borrow small amounts
A payday loan will normally only lend up to £1000 whereas many other types of loans will lend much higher amounts. If you only want a small amount then it can be sensible to go for the payday loan which will only lend a smaller amount, rather than taking on a large loan. Sometimes it can be tempting to borrow more than you need, so that you can treat yourself to a few extra things. This is not wise for a selection of reasons including the cost and the term. A smaller loan can feel easier to cope with, it does not feel so daunting and you will not need to borrow more than you need. With some loans you have no choice but to borrow more than you need and then you will be paying interest on far more money and the loan could last a lot longer. It can also be stressful to think about that amount of money being owed and so borrowing a smaller amount can make you feel a lot better.
Quick to repay
With a payday loan it will be very quick to repay. This is because the loan has to be repaid in full on your next pay day. This prevents you from being able to have a loan that goes on for a long time. This can be a relief for many people, especially those who are stressed by having a loan hanging around for a long time. It can be a good feeling to get the loan cleared quickly. It is therefore likely that you will have the loan paid back in a few weeks which can be a very positive thing. Knowing that it will be gone quickly and being able to make sure that it does get paid off quickly should help you to feel much more positive about the whole situation.
A payday loan is really easy to set up. The application process is really simple and it can often be done over the telephone or online. You will not have to fill out loads of paperwork or sit down with a bank manager, you can just send a few details. It can be very much easier than other loans and therefore a lot of people feel that it is preferable. Some people just get put off loans because of all the paperwork and so it can be a great relief to them knowing that they will not have to worry about this.
As you can see, the payday loan has many features which could appeal to a big variety of borrowers. Although the loan is very useful for use in emergencies because it is so quick to arrange there are other reasons that people might want one as well. Even if they do not need the money urgently, they might like to use one because they want to only borrow a small amount, want something that is easy, ant to repay quickly or want to avoid having a credit check. It is therefore worth thinking about whether a loan like this could be useful to you and if so, take time to find out more about them. It is wise to make sure that you are aware of how much they cost and consider whether you will be able to cope with repaying in one lump sum. Compare prices between payday lenders as well, so that you make sure that you find the loan which offers you the best value for money.