Are payday loans helpful?

Payday loans are short term cash loans designed to help you out in times of temporary cashflow shortfall or when unexpected emergency payments arise. Have you ever had a tyre burst and struggled to see how you can afford a new one before you get paid? This is where a payday loan can be helpful.

Payday loans have quick applications that usually take no longer than 10 minutes to complete, and if your application is approved, the funds are often transferred on the same day – hence the term, same day loans! The affordability and creditworthiness algorithms are designed to consider people who may have a bad credit history or low credit score, so even if you’ve been rejected from mainstream credit providers, you might still find a payday loan can help you out when you need cash fast.

When can a payday loan help?

A payday loan can help in those times when you’ve had one too many surprise expenses or maybe you weren’t paid as much as you thought. The running theme is that you are in control of your finances, but you just need a little helping hand this month.

Consider your upcoming commitments

You need to have considered all of your upcoming financial commitments, including one-offs like car MOTs as well as regular payments like phone bills and gym memberships before you submit an application. If you don’t fully consider your expenditure before you apply, you could find the repayments become unaffordable or you miss the repayments altogether. Not making your repayments on time can result in money problems and credit being harder to obtain in the future (ultimately not helping in the long-run).

Compare payday lenders

Compare loan lenders to find a payday loan that suits you and your particular circumstances. They may all seem the same at the surface, but different payday lenders will have different repayment options, borrowing amounts, loan terms and even default fees.

Use payday loans responsibly

Ways to use payday loans sensibly might include:

  • for payments that can’t wait until payday
  • to cover bills that if left unpaid will accrue arrears
  • for expenses that would result in worse financial circumstances if ignored

Whether payday loans are helpful is a relatively subjective question as it largely depends on your current circumstances, why you need to borrow and if the repayments are affordable. Like any credit, payday loans can make your situation worse if used irresponsibly or alongside several other types of credit. While it’s not uncommon to have a credit card and a payday loan at the same time for example, if you are applying for an increasing number of credit products or using one loan to repay another, payday loans are not going to help you. Similarly, if you find you’re failing to meet your financial commitments on a monthly basis, or your income isn’t quite stretching to cover all of your outgoings anymore, it’s almost certain that borrowing money will not help. Instead, you should seek free debt advice to arrange a more suitable plan for your current financial commitments and avoid taking out further credit.

Getting Debt Help

Getting debt help can be a taboo subject which results in many individuals and families suffering with money troubles for much longer than they need to. Whether you’re in serious arrears, or just starting to worry about your finances, it’s never a bad time to reach out for help. Tackling the problem early could save you money, as well as stress. If you’re unsure about contacting a third party, open a conversation with a trusted family member or friend first. They can help you reach out to more professional sources of advice, or they may just offer support while you contact your creditors directly.

Final Notes

Payday loans can be a great way to manage short term cashflow and unexpected emergencies. With quick applications and almost instant loan transfers, your financial panic could be resolved within a few minutes. But all borrowing – whether a payday loan, overdraft and even mortgages and bank loans – must be considered thoroughly before you apply. There’s no point using a quick solution if it actually causes bigger trouble down the line. Payday loans are designed to help, not hinder your finances!

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