Top 5 Reasons Why People Get Loans

At this moment in time, millions of people from all around the world are constantly falling behind monthly payments, due to increasingly higher taxes and smaller salaries. Things tend to get considerably worse, however, for those who face financial issues. Rather than borrowing small amounts of money from friends and family, you may want to consider the idea of getting a payday loan, to help you overcome the financial situation that you are dealing with.

However, thousands of people don’t really know whether they need a payday loan, so in this article, we’ve compiled 5 of the top reason why people from all around the world constantly get payday loans.

Before anything else, it is important to be aware of a couple of factors. Firstly, it is not encouraged to live pay check by pay check, while supplementing your income with payday loans, as this can put you further into debt, and not put you out of the damaging financial situation that you are facing. Based on this, it is often recommended that you only get a payday loan when you truly need it. Not only this, but it is also important to keep in mind the fact that payday loans are usually small amounts of money, meant for dealing with various financial emergencies. In case you are looking for a long-term loan, then chances are that payday loans will not be enough. Rather, attempt going to your local bank, and discussing things over with the credit manager or assistant over there.

1. You may need a payday loan in the unfortunate case that you don’t have enough money on hand, to pay for everyday expenses, such as food, rent or utilities

All households have a monthly expense that they need to cover. The mandatory one comes in the form of rent and utilities. While it is possible to consume fewer utilities, and hence lower the taxes that you’re paying, chances are that this often won’t be enough, especially if you’re already in financial hardship. With this in mind, if you constantly find yourself falling behind the monthly expenses, you may want to consider the idea of a payday loan. However, before you do so, you may want to do a bit of budgeting, to make sure that you won’t fall further into debt.

With this in mind, it is recommended to follow the principle that states that household income must be higher when compared to household expenses. Based on this, create a household budget, and carefully see how your money goes to pay for utilities and other taxes. Keep your monthly income in mind, and try to better deal with both your mandatory and optional expenses. Once you have done this, if you still find yourself falling behind on payments, you should indeed, consider the option of a payday loan.

2. You may need a payday loan in case you’re dealing with medical emergencies

Medical treatment is often quite expensive in areas throughout the world. In the US alone, an open heart surgery, for example, will cost around $320,000, whereas a small bowel resection will cost around $80,000. While you definitely won’t be able to pay for such interventions with a payday loan, you can pay for smaller ones, such as a dentist emergency, flu, or a common, treatable disease, which requires the purchase of medicines.

3. Your car might break down

Cars are an important part of any household. In case your car breaks down, then you may have a considerable repair bill, based on the type of insurance that you have. It is often recommended that you constantly maintain your car, to avoid further issues later down the road. To help you achieve this, payday loans represent a great option, considering the fact that most vehicles don’t break down on a monthly basis.

4. Payday loans are great for unexpected travel costs

In case you’re planning to travel somewhere, but quickly realize that it will take more money than you initially calculated, then payday loans might be the option to get you out of this mess. Based on this, if you do want to get the most of your travelling, then a payday loan might be the optimal solution.

5. You may need a payday loan if you’ve managed to max our your credit card, or to get a collection agency off your back

As payday loans represent a quick way to get some money, in the unfortunate case that you have debt that you need to pay as soon as possible, then such a loan may just be the answer. The same goes when it comes down with debt collection agencies.

Based on everything that has been outlined so far, there are numerous needs for payday loans. If you ever feel like you are running out of money, or a surprise financial crisis occurs, then don’t be afraid to request one.

The Advantages of Payday Loans

Throughout the world, millions of people find themselves needing some extra cash on a daily basis, and this is quite understandable considering the fact that capitalism isn’t strong enough to ensure that everyone gets the amount of money that they truly require. When facing financial issues, people often attempt borrowing money from their friends and family, but also from banks and other lending companies.

However, this isn’t always the best decision, considering the fact that borrowing money from friends and relative has the potential of damaging a relationship, and that borrowing from banks can often be quite risky, due to high interest rates, a need for great collateral and hidden costs. These issues have slowly lead to the appearance of payday loans, which represent a common resource, meant to be used as emergency funds. In case you are considering the idea of accessing a payday loan, it’s best to be aware of the benefits associated with doing so. With this in mind, this article will focus on five of the main advantages associated with payday loans.

1. They are a fast resource

Payday loans have always been referred to as a fast source of cash, whenever people deal with a financial emergency, or wish to buy something as soon as possible. Some examples include needing to fix your car, paying a fine, or needing to remedy a health issue immediately. A payday loan can provide people with the money they need, in less than a few hours, and even online, with a couple of clicks.

2. Payday loans do not require a good credit. You don’t even need to submit your credit report for review.

With this in mind, if you currently suffer from a bad credit score, then your chances of getting access to a payday loan will not be limited, as credit score doesn’t really matter in this case. Rather, payday loans require people to have a job, and get a monthly salary. Most of the times, the amount being loaned out will be a bit smaller when compared to your monthly salary, in order to make sure that you’re able to pay the sum back.

3. Payday loans may save you money in the short-run

With this in mind, some people may use payday loans to pay for their utilities, or pay monthly rent. Being late on such payments can actually bring in extra taxes, thus costing you more when compared to the interest fee charged by most payday loan companies.

4. Payday loans will help protect your credit rating

Understanding how payday loans have the potential of protecting your credit rating is quite important. With this in mind, once you take a payday loan to help you out for a couple of days, you can avoid additional debt and other similar charges, thus keeping your credit score clean, if damaged, or even improving it from time to time.

5. Payday loans allow users to be somewhat more independent

Payday loans are popular for the fact that they can teach both younger and older people to efficiently manage their budgets. Based on this, upon getting a payday loan, the borrowers will learn more about what it is like to budget, how to save money, and how to avoid needing to get a payday loan the next time. It also helps you be more independent, as you won’t have to spend your time asking your friends and families for a small loan, thus damaging your credibility, but also relationship with your closed ones.

It is worth pointing out, however, that payday loans are meant for short periods of time only. With this in mind, if you’re looking for a loan that extends over a couple of months, then this might not be the solution for you. Not only this, but payday loans also require the borrower to have a full time job, and to have a valid bank account. Most payday loans are limited to £1,000-£2,000, depending on the job that you have your age and a couple of other factors. Regardless, the application process is quite simple, and if you have a stable job, then chances are that you will be eligible for the loan, regardless of whether you have much to offer as collateral, or if you have a bad credit score, thus making them a viable and efficient source of financing for all sorts of emergencies.

Based on everything that has been outlined so far, payday loans are meant to help you find ways of budgeting better, but are also meant to help you deal with small financial emergencies of all kinds, while avoiding the need of asking your friends and family for money. Upon getting a payday loan, make sure to only look for reputable sources to avoid any issues later down the road.

Why you Shouldn’t Lend Money to Friends and Family

Chances are that during your lifetime, you’ve been asked to loan money by your friends and family a couple of times, and this is completely understandable, considering the fact that we all face tough times in life, where we do need some extra money. However, it has often been said that loaning money to family and friends is a bad idea for a couple of reasons.

In this article, we will explore some of the top reasons why you should think twice about lending money to your family and friends, especially since there are tons of banks, and lending companies that are more than willing to do the same thing for you. Not many people are aware of this, but lending money to family and friends can create a precedent, thus bringing in an unexpected number of problems.

1. Open-ended loans

Most of the times, loans made to friends and family are open-ended, which means that that both parties often don’t reach an agreement when it comes down to repayment terms such as the timeline, or interest. With this in mind, lenders often don’t know when they can expect to have their money back, and there is absolutely no guarantee that they will get their funds back, thus leaving both parties in a limbo state, where no expectations are set due to the connection between the two people. Based on this, the borrower may worry about when the lender expects the money back, and vice-versa.

This is why, whenever it comes down to lending money to friends of family, if you do want to do it, it is important to set some straight guidelines, and offer the borrowers a timeline during which they should return the money.

2. It is often difficult to ask for the money back

Absolutely no one wants to be in the shoes of a person asking a borrower for the money back. Upon lending money to friends and family, the two parties share an emotional connection, thus making it difficult for the lender to ask for the money back, while also increasing worry. Upon being asked to return the money, the borrower can end up being confused and having their feelings hurt. If you’re ever in the position of having to ask for the money back, make sure that you do it nicely, and allow the other party to understand that you need the funds for personal, objective reasons.

3. The borrower may end up asking for more

If is often not an issue if a borrower offers the money back after the agreed timeline, yet, there are times when the borrower may ask for a bit more money, and this can become frustrating to both parties involved in the agreement, thus leading to financial problems for both parts.

4. You often won’t get any interest from borrowing money

For those who are more focused on making a profit, borrowing to either friends or family will likely not bring in any profit whatsoever, as asking for an interest fee can be quite challenging, and even damage the relationship between the two parties. If a party has some money to spare, than chances are that they’d like to keep it in the bank and earn an interest, or even invest the funds into purchasing an asset that can bring in additional money.

5. You might need the money urgently

Different life situations may require people to need more money than usual. In case the lender is affected by any form of financial problem, such as losing a job, dealing with a health condition, or going bankrupt, then chances are that they may need the money back earlier than previously agreed. This can then lead to numerous issues for both the lender and the borrower, as the second party may not have the money ready for return just yet.

6. You give your friend/family member an easy way out of a financial situation

Lending often offers people a quick getaway out of a risky financial situation, yet, once a person borrows money, that doesn’t meant that their initial financial issue has been solved. In fact, it has just gotten worse. You may want to consider asking your friend or family member to find better ways of budgeting, especially if you know what the money being lent will be used for.

Based on everything that has been outlined so far, there are cases when you might want to lend money, and times when you might not want to do so. Making the difference can be essential to keeping your relationships healthy, while also not losing any money whatsoever. Based on this, it is important to learn when to say no, but also to encourage borrowers to seek out other solutions, such as payday loans, or even bank loans, which may be better suited to their needs.