While payday loans have gotten a bad rap, they serve an important purpose for many and can be beneficial when used properly. There are many families across the country who live paycheck to paycheck, and an unexpected emergency can be instantly devastating financially. According to Pew Research, 12 million Americans use payday loans and have an average annual income of $30,000, making it difficult for most to easily cover their monthly expenses. The popularity of this type of money loan has ensured that there are also many lenders such as iCash that will give you some offers that will meet your requirements and expectations.
Payday loans are easy to obtain by providing proof of identity, bank account information, and proof of income. Most borrowers can get cash in just minutes, and some lenders even offer them online. The problem comes when they become caught in a never-ending cycle of payday loans by continuously rolling them over by taking out new loans to cover the payment for the original one.
To use payday loans wisely and not become caught up in this financial nightmare, take these tips into account.
Save Payday Loans for Emergencies
Payday loans shouldn’t be used because you want the latest iPhone or anything else except for a true emergency, like a vehicle breakdown that leaves you without another way to get to work. It’s important to take the time to consider whether it’s an emergency necessity or a non-emergency to make the best choice, taking a payday loan out only when it’s truly needed.
Take Out the Loan for the Smallest Amount Possible
Many payday customers take out a loan for the maximum amount that’s offered. Some lenders may allow that loan to be paid back over multiple installments rather than just one, but that’s a huge financial risk. Borrow only the minimum amount you need for the emergency. While it may be tempting to borrow a little more just in case, it’s a quick way to get in over your head and end up in a financial mess.
Never Get Into the Cycle Of Continuous Payday Loans
If you don’t pay the loan off when it’s due, instead of taking another one out to cover it, the fees and interest will quickly add up to such an exorbitant amount there’s a good chance you won’t be able to pay it back. When the APR is calculated with all the fees incurred, the rates can be 500% or even more, something that can do a lot of damage to anyone’s budget, and ultimately their credit score too. It’s a must to pay the loan back as quickly as you can unless you relish getting yourself into a hole you can’t dig out of.
Budget For Emergencies
After paying off your payday loan, sit down and create a budget that will allow you to save for emergencies. After all, the interest and fees you just paid could have gone into an account that can prevent the need in the first place. If you truly don’t have anything left in your paycheck that allows you to save, consider taking a part-time job. It’s important to have at least a cushion in your bank account, and ideally, three months of income saved.
Benefits of Payday Loan
If you are wondering what are the advantages of taking the Payday loan, we prepared a list of some crucial ones in order to help you make the decision of conducting this procedure if you need to.
You have the opportunity to receive money immediately
No matter whether you are applying through an online service or in person, the necessary information and personal details are just the most important ones. As you see, there are two methods available for you if you decide to try with this Payday loan option and get an automatic transfer of money. Also, the forms you need to fulfill are very easy. After you finish with the applying procedure, you will get approval in a few minutes. Best of all, you can receive the money immediately, on the same day you presented the forms. Sometimes, if you are lucky, you will get money within the hour. All of this makes a payday loan the perfect opportunity to receive money very fast and use it for whatever you need.
The loan process is very convenient
One of the best advantages of the loan procedure is that you do not even have to book the appointment and wait for your meeting. That means, there is no need to contact your bank’s loan assistant or to provide some personal information. As we said in the previous paragraph, you have even an online option if you do not want to go in person to finish the procedure. Best of all, you do not have to follow traditional loan rules that dictate how you spend your money. That means if you get a mortgage to pay for a house, or, on the other hand, if you get a loan to buy a car – you are not obligated to use the money for that. In other words, you can use your money the way you want because payday loans now do not have strict and limited rules for their use. Even if you take a car loan, you can use it to pay your bills and debts, for some other payments, credits, or any other thing.
You are getting the assurance of Confidentiality
When it comes to a Payday loan, people are very skeptical because they are afraid of some potential fraud or scams. More precisely, they are afraid to provide their personal information and details to a payday lender. They are often wondering whether this is a safe option which is a normal thing for all the procedures where money gets involved. We have good news for you. This is an absolutely safe method and you as well as your personal information will be protected and remain confidential.
You need to know that it is not legal that your lenders share your personal details with someone else and use them against your knowledge and without your approval. This counts even for marketing purposes. In short, you do not have to stress about this and be free to use this Payday loan option if you need to.