Life is an ongoing learning experience. Even the smartest people in the world don’t get things perfect the first time around. Nearly every endeavor in life takes a bit of trial and error to get right. This is especially true of financial skills. A lot of people get out of school, start working and then do their best to ‘wing it’ when it comes to their finances. That game plan doesn’t always work out that great, but you live and you learn.
Payday loans often get a bad rap from news outlets. The real issue with these types of short term loans, though, is that some people take the wrong approach to borrowing when they take out payday loans. We want you to be a smarter payday loan borrower. When you understand the right way to use payday loans you can avoid some of the mistakes that cause problems for people who borrow money without a bit of financial know-how.
You Need Fast Money But Want to Protect Your Credit Score
Some people apply for a new credit card when they need to make emergency purchases. As you probably know, every time you apply for a credit card, that counts as a hard inquiry on your credit report. Before too long, those inquiries add up and they wind up hurting your credit score. If you are trying to rebuild or salvage your credit score, you may be better off taking off a payday loan when you need some fast cash. These loans allow you to get some fast cash in your pocket without damaging your credit in the process. It is also important to know that payday lenders don’t run credit checks, so if your credit score is subprime, you can borrow money from most payday lenders without your credit rating getting in the way.
To Avoid Expensive Late Payment Fees
If the price of a payday loan is less expensive than paying late payment penalties, it only makes sense to take out the payday loan. Here’s a quick example for you: Let’s say your mortgage payment is due, and you are a hundred bucks short. Paying the 15 dollar fee to take out 100 bucks via a payday loan may help you to avoid paying a higher penalty payment to your mortgage lender. Any time a late payment fee (like a checking account overdraft fee) is going to cost you more money than you’d spend paying back a payday loan, it is the right idea to take out the payday advance loan instead.
You Can’t Wait Around for Payday
Emergencies happen! It seems like the furnace always goes out on the coldest day and when you have no money to pay for repairs. Or the car breaks down on a rainy day and you are still two weeks away from your next pay check. If you find yourself in an emergency situation and simply don’t have the access to cash that you need to bail yourself out, it may be the right time to take out a payday loan. As long as you know you’ll have the cash in your bank account to pay back the loan on time, you should have no worries about taking out a short term loan to get you by for the next few weeks.
As much as some people try to vilify the payday loans industry, the fact of the matter is that these loans are vital to millions of people every year. If you find yourself in one of the situations that we just described, you may find that a payday loan is just what you need.