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When Does It Make Sense to Take a Payday Loan?

People used to look down on others that couldn’t make it to the end of the month and would rely on a payday loan to get through.

Well, these days even people that have good careers, education, and even a nice house need to get some kind of cash advance to survive until they get paid.

From overwhelming student debt to a mortgage that is underwater and an emergency illness, there are a lot of valid reasons that you would need to take a payday loan.

But, there is still that stigma that you are not being smart financially when you do this. Are there times when it does make sense? Yes, there are some good reasons for doing a payday loan over other types.

In this article, I will go over several of the reasons you may want to take out a payday loan to get your bills paid.

Cheaper than Taking on Credit Card Debt

Even though many payday loans are quite expensive, they can still be cheaper than using your credit card to pay for things until you get paid.

If you end up carrying the balance for a few months, that interest will add up. If you don’t pay it off right away, you will likely have that debt accumulate over the period of a few years and that will cost you hundreds more than if you simply took a quick and easy payday loan.

No Damage to your Credit

Whenever you apply for a loan or credit card, there is a check on your credit score. Too many of these inquiries can end up damaging your score. This is especially true if you get denied for those loans.

And if you already have bad credit, it can be hard to build it back up again.

When you take out a payday loan, many lenders will only make a soft pull on your credit score that doesn’t show up on a report or damage your score. Some won’t check at all so you are hardly likely to see any negative impact just by applying for one.

And there are hardly any reasons to be denied unless you are trying to borrow more than your paycheck.

It is Quick

Getting a personal loan can take quite a bit of time even when you have perfect credit. And if you only need a small amount of money to get through then it hardly makes sense to have to jump through the hoops necessary for a bank loan.

Instead, a payday loan can take a few minutes with very little hassle. When you need fast money, there are not many ways that could be quite as fast to get you the money you need in an emergency.

What to Do Next?

You should only be using these loans in case of an emergency and then look to climb out of the hole as soon as you can. Cut your expenses, take on a part-time job, or sell some of your stuff to make sure you don’t get into a payday loan cycle and dependence.

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