Top 5 Biggest Reasons to Apply for A Payday Loan
In some situations, you may need to seek out short-term lending options, we break down 5 of the most common reasons to get a payday loan.
You may have a situation where all you need is a small amount of money for a short period and you don’t want the hassle of too much paperwork, credit checks and having to provide collateral.
In some situations, this simply isn’t practical, such as when you need to unexpectedly make car repairs or have some emergency dental work. In circumstances like this, applying for a payday loan may be your best option. Here are five good reasons to apply for a payday loan.
- Receive money quickly for an emergency
Same-day payday loans can be a good way of borrowing if you need a rapid injection of cash into your account for an emergency. A payday loan from Moneyboat can help you if you borrow only what you need and pay it back as soon as you can. It doesn’t take long to approve a payday loan and you can have funds in your bank account within 24 hours.
This can be incredibly helpful in certain situations. If your car breaks down and you can’t do without transport, you can take out a payday loan without having to provide collateral or go through a credit check.
When you quickly have cash in hand to pay for the repairs, there are no delays and you don’t have to suffer any of the negative consequences of not having transport, such as not getting to work on time.
- Enjoy the convenience of online application
When you’re faced with unexpected expenses, you want the easiest and most convenient way to access money. Many online lending businesses operate online and you can make use of their services 24/7.
It is possible to get a payday loan online for an amount that usually ranges from about £200 to £1500. You will also typically have access to a personal online account where you can log in and see what you owe and your repayment dates.
Setting up automatic payments online can be convenient. Signing a continuous payment authority (CPA) means the lender can automatically take money from your bank account.
If there isn’t enough money in your account to repay the loan on the due date, lenders can add late payment charges and try to get part payments. Reputable lenders won’t use a CPA more than twice because they realize how much financial stress this puts on borrowers.
- Face no restrictions on how to use the loan
Many loans require you to state how you’re going to use your money but you don’t need to do this when you apply for a payday loan. Payday loans come with a time constraint and if you act responsibly, you can use the money however you want to use it as long as you pay it back on time.
Some people will use payday loans to buy expensive gadgets or take holidays, while others will use them for emergencies and unexpected expenses. It’s best not to use payday loans for items you can’t afford, especially if they aren’t a necessity. However, if you can’t pay your utility bill and you don’t want to have your services disconnected, a payday loan could tide you over and give you the help you need when you need it most.
- Receive protection with fee and interest rate caps
There are those who complain about the high interest rates of payday loans but you need to keep in mind that lenders have to be compensated for the risks they take. The less they know about you, the more risks they face that they won’t get their money back.
The Financial Conduct Authority (FCA) limits the amount of interest lenders can charge. If you pay back your loan on time, the cap on fees and charges helps to protect you. Daily interest and fees cannot exceed 0.8% of what you borrow and default fees can’t be more than £15 in total. Licensed payday lenders also have to clearly disclose their terms and conditions and if you read them, you will be aware of your responsibilities.
- Don’t miss a monthly payment with high interest rates and fees
A short-term loan could prevent you from missing a monthly payment which results in paying more interest fees and charges than you would on your payday loan. This can happen with things like credit card debt which attracts high interest rates. Making your credit card payment on time could help you to save yourself from extra fees and high interest rates charges.
This won’t work if you don’t pay back the loan in time. If you don’t pay it back in time, the payday lender could offer you an extension or rollover, whereby you make a new agreement but this means you will have to repay more money in interest and extra fees.