Payday loans are small, short-term loans that are ideal for paying off sudden and unforeseen expenses. You can also utilize them to pay outstanding utility bills and cover usual expenses in case you run out of ready cash between paychecks.
This means that payday loans are extremely useful to the cash strapped. Nevertheless, remember that they also have their own pros and cons, which brings up a very pertinent question: should you obtain one?
The following is an outline why (or why not) you should avail of a payday loan, as compiled by utahmoneycenter.com.
Advantages of Payday Loans
• They are easy to apply for.
• They come with quick approvals.
• Cash is available immediately and deposited directly into your account.
• No credit checks involved.
• Gives you sufficient amount to cover utility bills, medical expenses, tuition fees, etc.
Disadvantages of Payday Loans
• These carry interest rates of up to three digit figures.
• The repayment terms are stringent.
• The loan terms tend to favor lenders rather than borrowers.
• Penalization and legal complexities loom large if you cannot repay the loan on time.
• It is not a long-term financial solution.
Should You Get One?
In light of the pros and cons of the payday loans, you must obtain one only if:
• You face genuine financial emergency and you do not have cash on hand.
• The expense is an absolute necessity, such as a medical bill. Vacation costs are better off not paid via a payday loan; get a personal loan instead
• You simply cannot wait until your next paycheck to make the expenditure; for example, a car repair.
• You have the financial means to repay the loan on time.
Finally, remember to borrow only as much as you need against a payday loan. These tips will keep you away from a deep financial eddy that some payday loans could prove to be.