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Why not to use a Payday Loan to pay for a Vacation
We all run into those financial emergencies at one point in our life. Some people have money saved for these occasions, others use credit cards, and others again use a payday loan to fill the financial gap for the 15 to 30 days where we need the cash. This is what a payday loan is for. Be able to make it to the next paycheck. Pay for the car repair because without a car you will be out of work soon. Situations like this are where the payday loan does its duty.
However, some payday loan lenders advertise their loans to be used for normal consumer needs. Needs? Well, not really. These lenders play with your desire for having a new TV, a new iPhone or iPod, or to go on vacation. Sure, we all like to treat us to those nice things in life, but we need to be able to pay for it and not necessarily to buy these items on credit. Especially, not to buy these items on very expensive credit.
While this article is mainly written with the payday loan situation in mind, it also applies to using a credit card to pay for these items. In both cases you put a consumer purchase onto a very expensive credit account. The initial interest fee on the credit card might be lower, but statistics show that consumers easily need 18-24 months to fully pay off their purchase. That is very expensive at 18%-27% if you ask me. A payday loan is even more expensive, but it forces the customer to re-pay the loan much faster, which is a good thing. The initial interest rate for this type of loan is higher, but the time between when the loan is taken out and when it is paid back is much shorter.
So, while these are the basics the real story is that both types of loans are not designed to be used for normal consumer purchases. We all have seen what the last recession has done to consumers who were in debt way over their head. The number of foreclosures and bankruptcy filings has sky-rocketed. While some blame goes out to the banks and mortgage companies, a lot of blame has to go to those consumers who financed non-critical purchases with very expensive loan type. Everything is good while you have a job, but when the money gets tight these loans are going to destroy your financial status.
Conclusion: Payday loans are a financial product that is designed to be used in a financial emergency. It is expensive, but payday loans are granted faster than a normal bank loan + they do not affect your normal credit history. A fast payday loan is not to be used for normal consumer purchases for gadgets, TVs, iPhones, or cars. Used with the proper understanding of how these loan work is essential to your financial well being.
Easy to Get Payday Loans
If you find yourself short of cash before payday and need a cash advance by the end of your working day, Payday loans are a good option for you. These are short term loans and the best part is that you can apply for the loan on line without any documentation or paperwork. Also, there is hardly any waiting time as the loan request is processed within hours.
What you need to do is fill up a simple application form and submit it for approval. Customers are immediately informed if they qualify for the loan. This eligibility testing is done by the payday lenders with the help of various data sources available in the country. If you have a good credit history then your loan will be approved and it will be intimated to you. Other details such as the loan amount they have been approved for are also communicated. The payday loans are really helpful for those who have a bad credit history and those who have been turned down by banks and other lenders who continue to make their lending policies stricter.
To avail the benefits of payday loans one need to fulfil certain eligibility criteria. This mainly includes being a citizen of the country, should have a regular job (most of the lenders will not provide you a loan if you are unemployed or self-employed), should be more than 18 years of age and should have a bank account in working condition. While applying for the loan if you have any doubt or there is something which you are not sure off then every lender includes a useful FAQ section in their website that explains every aspect of a their service in detail. A common belief about payday loans is that they are solely targeted at those who are in deep financial trouble. Although most people plan their monthly budget carefully and regularly keep a tab on their expenses, there are times when they may be strapped for cash. A payday loan is simply a financial tool that helps them face these situations head on, and saves them a lot of time and worry by skipping the long lines and paperwork and providing them with the cash they require.
Payday loans make the process of applying for instant cash simple and convenient, by eliminating the need for faxes and paperwork altogether. Those in need of cash can be approved for a loan within minutes, simply by filling out an online application form.