If we need money quickly then it can feel that a payday loan is the only option that we have. However, some people feel that they would like to look at all of the options before taking one out. This is sensible and it is good to understand your situation and how the loan works to make sure that it will work well for you. So find out what payday loans are for and whether they will suit your need.
Who is a payday loan
Payday loans were designed to make money available for those people that have a poor credit record and therefore have very few other borrowing options. This means that anyone is accepted to take out a payday loan as long as they have a bank account and an income, are resident in the UK and over 18. This means that the money is available for most people.
Payday loans can also be arranged very quickly. It can take anything for a few hours to a few days to organise the loan. This means that if you need the money quickly then this can be a good option for you. You will be able to get the money you need without the usual delay that you will have if you apply for a loan from a conventional lender.
This means that there are two types of people that a payday loan is aimed at. Those that cannot borrow money anywhere else and those that need money quickly. This means that if you are either of these situations then it could be that a payday loan is right for you.
It is always wise to think about all of your options when you are looking to borrow money. Although the payday loan may seem like the perfect solution to your problems, it is worth checking to make sure that there are not any other solutions that might be as good or even a bit better.
It is therefore worth starting by looking to see whether there is any other type of borrowing that might work for you. Try to look at all options, not just the conventional ones and see what is there. Do not just compare the costs as although this is an important aspect of borrowing there are other things that you need to consider as well. Think about the additional costs added on if you cannot repay on time, how good the customer service is, how flexible the loan is and the reputation of the company. Think about what you would like in a perfect lender and see how closely the different options you have fits the mark. If you think that you are unlikely to be accepted for other forms of borrowing it could still be worth getting in touch with the lender to find out. They will know whether it is worth you applying or a waste of time as they will know what criteria will be used to decide, so you can explore those options as well.
Some people will borrow money even if they have savings. This is an expensive compromise to make as if you used savings instead you would not have to pay any interest and you can repay it to your savings account on your own terms.
Some people will borrow money to pay for things that they can do without. This means that they have the expense and stress of borrowing when it is not necessary. Think about whether you really need to borrow the money or whether you can cut down spending in some other area to free up the money that you need. Payday loans were set up to pay for emergencies not to fund general spending which is another reason why it is best to just use them for this purpose.
The main thing is not to panic. If we need money in a hurry then it can be tempting to just go for the first loan that is offered to us. It is wise to try to be calm and spend a bit of time looking through the options so that we do not make a decision that we regret. There will be options available, even if you are just choosing between payday loan companies. It is worth exploring them all and comparing them so that you can find the best option for you in your specific circumstance. It will not necessarily have to take that long either and even if you just do a small amount of research; at leats you will know that you have had a go and found the best solution that you could with the time that you had. It is too easy to rush and then regret the decision that you have made.