When is a Payday Loan Right for You?
Cash advance loans are an easy, quick and convenient way to get some extra cash to
meet sudden and urgent expenses when you don't have the money up front to pay, but determining when you should take out a payday loan is vital in ensuring that you avoid ongoing financial difficulties. Repaying a loan is ultimately your responsibility and before you take out one of these short term cash loans, you really need to understand fully how they work and the implications of obtaining cash this way.
These days more and more people are considering a payday loan as a way of meeting small expenses due to their short approval times, their hassle free application process and their affordability. While there is a lot of legislation in force in relation to the payday loan industry, which is aimed at protecting borrowers from exuberant fees and long term financial pressures resulting from taking out such loans, at the end of the day, taking out a payday loan is the borrowers choice and thus it is up to borrowers to obtain all the facts regarding these loans before deciding on whether or not these loans are the right option for them.
Quite obviously the first thing you need to consider before taking out a payday loan is whether you can afford to repay this loan, including all fees and charges associated with them, from your next paycheck. Under the conditions of a payday loan the total outstanding balance of the loan generally needs to be repaid within the month and, since these loans are usually of a small amount, in most cases it is reasonable to adhere to these repayment terms. Having said that, however, it is important that you consider your regular monthly financial commitments before taking out a payday loan.
Another situation where a payday loan may be a good option for you is when you would otherwise charge these expenses to your credit card with the intent of paying the balance within the interest free period. While paying the balance of these credit card charges within the interest free period would incur no additional charges, the reality is that when charged to a credit card, people will rarely repay these debts in full within the interest free period and thus these charges could end up costing you a fortune when ongoing interest is applied. In these circumstances a payday loan may well be a cheaper and better option for you to consider.
Finally, in determining whether a payday loan is the right option for you, you should always consider the reason behind needing to take out such a loan. If the loan is required to meet a one off and unexpected expense that you haven't budgeted for during that particular pay period, then these types of short term loans can certainly help you out of a tough financial situation. If, however, you require extra cash on a regular basis to meet your general living expenses, then it may be best to revise your household budget and steer clear of fast cash advance loans and other short term loan products.
A payday loan is a simple and affordable loan option and almost anyone can be approved for such a loan but it is up to you, as the borrower to determine whether these loans are right for you by assessing your individual circumstances.
When is a Payday Loan Right for You?
By: Rick Houston
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