More Reasons to Take Out A Payday Loan – part 2

There are a lot of things, people, and activities that are misunderstood in this world. I think human nature calls for the average person to fear and to loathe things that they do not understand. It has been this way throughout the history of mankind and things are probably not going to change radically in the near future. As such, it is up to those who have had the chance to have their minds open to try and make others understand that which is misunderstood.

So, opening the subject of payday loans – these loans are probably one of the most misunderstood loans. Try doing a search on Google or MSN or Yahoo using the search terms “payday loan”, “cash advance”, and other similar terms. The chances are that within your list of results, you will see a considerable amount of articles and news items that belittle and scoff at payday loans. The main argument against payday loan is that they are “very expensive” loans and that payday loan providers prey on the vulnerable and needy. Yet how true is this? What is a payday loan, really?

A payday loan is a short term loan that is available to anyone who has need of it. Of course, they do come at a price – there is practically nothing free today. There are some requirements in order to be able to take out a payday loan. First, you have to be a US resident or citizen. You also have to be at least 18 years old. Another requirement is that you have to be able to prove that you have a regular source of income. This could either be several pay slips from your employer or if you have your own business, then your financial statements will do as well. Last, you need to have a current bank account.

If you meet all these requirements, all you need to do is to fill out an online application. Everything is done electronically so you do not have to go out and fall in line at the bank or any other physical premises. If your application gets approved – and they almost always do – then you can expect your money within the day or the next several days.

So what’s the big misunderstanding about payday loans? This revolves around one main thing – the charges, or interest as the detractors would like to call them. The truth is that payday loan lenders do not charge interest in the same way that conventional lenders do. As a result, when charges are translated into the more traditional APR, the result is quite astronomical. This is where the misunderstanding comes in. I believe that the charges for payday loans should be taken at face value and not tried to be turned into something else that may confuse people even more. Payday loan lenders charge a fixed fee for every certain amount borrowed. So, for example, if you borrow $100, you would have to pay an additional $20. If you borrow twice that – $200, then you would have to pay an additional $40. This charge may vary from lender to lender.

Hopefully that has given some light on the misunderstanding about payday loans.…


More Reasons to Take Out A Payday Loan

In the last post, we took a look at some reasons you have to take out a payday loan. Here are more compelling reasons you should take out a payday loan.

Emergency Medical Expenses
One of the most unpredictable things in life is the status of our health. We may do most everything right to stay healthy but sometimes, we just fall ill. Most of the time, medical insurance can cover the expenses. However, there are other expenses other than the doctor’s bills and hospitalisation. Medicine, for example, may not be covered by medical insurance – at least not all of it. Even hospitalisation may not be totally covered by it. In cases like these, you need to shell out more cash in order to pay for all the expenses associated with getting sick. One way to deal with these expenses is to take out a payday loan. You get the money quick and easily and deal with the medical bills immediately. Even if you were averse to taking out loans, when it comes to your health, you cannot really delay things. If you need certain medication, then you have to get it no matter what – and immediately. This is when a payday loan comes in really handy.

Avoiding extra charges on bills
I know, one of the most important things when it comes to finances is to NOT take out another loan to pay off an existing one. Yet why am I suggesting this? Simply because sometimes, you might have to do it in order to avoid bigger charges. Take for example a credit card bill that has been existing for quite some time. If you are unable to pay it off on the due date, you would certainly be charged a huge amount in interest and late payment fees. If you want to avoid this and you are sure that you will have enough money later on in the month to pay off a payday loan, then it would be better to take one out and get rid of the existing debt. The key here is to make sure that you will not run out of money to pay off the payday loan on time. Otherwise, you will just get caught in a cycle of debt.

This principle could actually apply to other types of bills – not just credit cards. Take for example utility bills. You cannot afford not to pay them off when needed – well, unless you can handle not having electricity or gas for a week or so till you are able to pay off your existing bill. In cases like these, it would be more sensible to take out a payday loan.

Always remember, though, a payday loan has its uses and it should be used properly. Do not fall into the trap of thinking that just because it is easy to get one, you should do so whenever you feel like it, without thinking whether or not you can repay it on time. The key is to be a responsible borrower.…