Why Payday Loans are Good in an Emergency

Why Payday Loans are Good in an Emergency

When an unexpected financial difficulty arises, you have several options for meeting the demand.

You can apply for a personal loan, cash out home equity, charge it to a credit card, or take out a payday loan. With most emergencies, a payday loan is your best option. A quick decision, cost, and ease of use are three factors to consider.

All other banking products fall behind in these areas, making a cash advance loan the obvious choice.

Quick Decision Process

To take out a payday loan, you must have ID, an open checking account, and a recent pay stub. There is usually no credit check and you get a decision within minutes in most cases.

Conversely, approaching a bank for a personal or equity loan can take weeks and mountains of paperwork to secure. Credit checks, home appraisals, contacting your employer for verification, and a laundry list of other tasks make traditional banks an unattractive option.

You may be asking yourself what would cause you to need cash in a hurry? After all, you have an emergency savings account! Think about the following scenarios.

• A relative in another state passes away or is involved in a serious accident. Do you have enough money to cover the airfare, a hotel room, meals, and other expenses?
• Your car's transmission suddenly fails. Do you have enough to cover the costly repair and afford a rental until it's done? If not, can you afford to miss a week of work while you wait for the repairs to be completed?
• A close friend announces her destination wedding in Hawaii in just four weeks. Can you pay for the tickets, dress, hotel, and a gift?

Costs

If you're thinking of taking a cash advance of your credit card, think again. Not only is there a fee associated, but the interest rate charged on monies taken is astronomical. Add to it that the cash advance portion of the balance is usually satisfied only after the purchase balance is satisfied.

This could lead to gigantic fees. Traditional banking loans also carry heft origination fees, points, and prepayment penalties. With a payday loan, you know up front exactly how much you will pay, including fees and interest. There are no surprises and it's cheaper.

Ease of Use

A payday loan is simple. Forget wading through pages of jargon and provisos. Most payday loans are only a page or two long. You write a check for the full amount and it is cashed on the agreed-upon date. Cash is then disbursed. It's as simple as that.

When faced with a financial emergency, a payday loan is quite often the best choice. A clear, concise agreement, low costs, and quick cash in hand means that you can handle whatever happens without wrestling with bank documentation or spending hours fighting with a credit card company. What could be better? Consider a payday loan for your financial emergencies and simplify your financial life.