If you need money in an emergency situation, then it is likely that you will be looking at borrowing options. If you have no savings, then you will need to borrow some money. You might have a selection of borrowing options available to you. However, you will need to consider a selection of factors to make sure that you pick the most suitable.
- Speed to organise – it can take a long time to organise some types of loans. If you already have a credit card or overdraft with some available credit to spend then these could be the quickest way to get the money. However, if you do not have this option, then it is likely that a payday loan will be the next quickest option. These loans can be organised with a few hours and so you really can get the money quickly enough to deal with an emergency. Some payday lenders will be open through the night and at weekends too so if you need the money at unsociable hours, you will still be able to get it.
- Credit rating– if you have a poor credit score then you may feel that you will not be able to borrow any money. However, a payday loan is available to those with a poor credit record and so you will not have to worry. The loans were actually designed to help those that could not borrow elsewhere because of having a low credit score. They do not do a credit check and so you do not have to worry at all.
- Ease of application – Some loans are very complicated to apply for. You have to complete a lot of paperwork and answer lots of questions. A payday loan is not like this. There is a very simple application process which means that if forms put you off, you will not have to worry. It might even be possible to apply online or over the telephone so you may not need to write anything at all.
- Repayment – many loans can take a long time to repay and it can be rather tedious to keep making those monthly payments. Trying to budget for a long time in order to make sure that you keep making those monthly repayments can be hard work. With a payday loan, there is normally just one repayment. You make it on the next day that you get paid. This means that there should be enough money available to pay it and you will not have to budget for very long before it will be paid off. It can be a relief to know that the loan will disappear very quickly and that you will not have to think about it for very long.
- Cost – it is worth comparing the costs of loans when you decide which one to take out. A payday loan is often considered to be expensive and so it could put people off. It is important to understand though that some of the extra costs are because you can arrange it quickly so they need lots of staff. They also take a risk as they do not do a credit check. They will also have admin fees, like all loan which you have repay at once, whereas with loans that are repaid over a longer time, these costs are spread over more time and so you notice them less. You do need to consider though, whether you think that the loan will give you good value for money.
- Lender – it is important to compare lenders. With payday loans you will find that there are lots of lenders available. You may have not heard of many of them though and so it is important to find out a bit more about them. You should be able to find out information on their website and perhaps online as well. If you have time it can be worth asking people you know as well as they may have used some payday lenders and may be able to make some recommendations.
Whether a payday loan will be the most suitable option for you will depend on your personal situation. It is good to try to spend some time researching your options if you can. If you need money quickly, you might not be able to spend long, but it is wise to do some research if you can as you will then be able to make sure that you are choosing the best option for you and that you are getting the best value for money. It might seem like a hassle but it will be worth it if it means that you get the money quickly and feel happy with how much you have paid for the loan and with the lender that you have picked.