Top 6 Reasons Why People Count More On Payday Loans
December 10, 2019, 2 years ago
Do you know why people count more on payday loans? People with poor credit score, no savings, and in need of immediate money have only one resort: a payday loan.
If you are reading this, you may have heard about this type of loan, or have received one. Although experts believe that getting one is a bad decision, then why many people are still holding on to it?
People with bad credit scores and those with no savings are oftentimes the best market for a payday loan. This type of credit company doesn’t take your credit history, so you don’t have to worry if you have a default.
Also, a large portion of Americans lives paycheck-to-paycheck. A survey found by Go Banking Rates found that 69 percent of Americans have less than $1, 000 savings. The startling survey just explains why they opt to run and apply for a payday loan or cash advance.
Here are the top 6 reasons:
To pay for emergency expenses.
One top reason why people turn to cash advances is that they can get instant cash anytime there is an emergency. It seems like their lifesaver.
Just take a look when you had an accident that calls for medical attention. One quick way to pay the hospital bills and medications is to get the loan that you can pay in your next paycheck if you don’t have medical insurance.
If you or your family member got sick, you can apply for a loan swiftly without worrying about getting turned down. You can receive the money within minutes up to several days.
To avoid borrowing from family and friends.
Another reason why people use this short-term loan is to avoid borrowing money from family and friends. Typically, people would borrow to a lender, but not to their family or friends to avoid embarrassment.
When you borrow to a lending company, you owe that money to a business. However, borrowing from somebody you know can cause embarrassment especially if they are going to tell it to other people. Borrowing from people you know can cause friction.
To spend during the holidays.
If there is a big celebration coming up like Christmas, you don’t want to run out of budget because it’s time for gift-giving. Taking a loan from lenders can ease the worries particularly if you don’t have any savings.
Applying for a loan before the holidays can solve your holiday woes. Others use the loan to take a vacation or tour during the holidays.
To save your credit score.
You may say that getting loans can be bad for your financial stability. However, if you have unpaid debts, taking a payday loan can help you because you can now pay your existing loan.
What’s good with this kind of credit is that you can apply for it even with a bad credit history. So, the money from a lender can help you pay another loan. However, it can be tricky.
If you paid your existing loan, make sure that you can pay the money you borrowed from the lender. If not, you’ll be in big trouble.
To pay bills.
You need to pay the bills every month. If you don’t have enough income and unable to pay bills, you’ll have more problems than you think.
Just imagine when you are unable to pay your telephone bills or apartment. You may end up homeless or your phone line would be cut. Taking the loan can save you from this mess.
You are declined from getting a bank loan.
Were you declined recently of a bank loan? Taking a personal loan such as cash advance can help ends meet.
But what if you don’t qualify to get a bank loan? This is when people turn to payday loans. Banks have strict requirements before they qualify borrowers for the loan.
Aside from that, there’s a long waiting period before you can get one. You also need to comply with the legal documents. Failure to do so can disqualify you from the list.
These are just some reasons why people turn to payday loans. With or without a loan, you must strive to have financial stability by managing your finances well. If you have loans, make sure to pay them on time to avoid interests and additional fees.