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The 7 Times You May Need to Take a Payday Loan

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Like it or not, our world runs on credit. We need a loan to buy a home, credit cards so that we can stretch our spending power, and also personal loans for a variety of requirements. But these traditional loans or credits are not always available. There are people who are simply not eligible. They may not be the practical option too when you need the money quickly, because traditional loans take time. A payday loan is an alternative, and is in fact, the most viable alternative, in many situations.

Who are the people who need a payday loan? What are the situations when a payday loan is the right option for you? Let us find out.

1. When The Current Credit Is Maxed Out

Let us assume you have credit cards and have taken loans before. However, there can be credit card debt, which you are presently paying off, but because of circumstances, you have to max out your card. In such a situation, you won’t be eligible for more credit because off too much credit, income not being regular or sufficient, or poor credit history. You can consider taking a payday loan.

The small-dollar cash advance will help you solve the immediate cash problem for a small fee. You can repay quickly. Since the amount is small, repayment is not a problem. You can manage the repayment along with your other credit repayments.

2. You Are Not Eligible For Traditional Loans Because Of Bad Credit

This is a common problem with a lot of people. Almost anyone can have bad credit, whether for the short-term or the long-term. Just a single default or missed payment can push you into the zone, and impact how the creditors will view your application. Perhaps you just forgot the due date. But that won’t be considered.

With bad credit, most people will try out all their options, any form of credit available, including overdrafts. They may even approach their current bank to see whether the bank would extend a small cash advance. But sadly, if you have bad credit, and if you are suddenly facing an emergency and need some cash, then none of these creditors are going to help you. You need to approach a payday lender.

You have just a few dollars more to repay with payday loans because the loan amount is less, and the duration is just for a few days. Repayment is easy for the vast majority of people. It’s the much needed cash when you need it, which matters the most.

3. You Need The Money Because Your Car Broke Down Suddenly

A payday loan is virtually the only kind of credit you can get really quickly, unless you have a credit card, can take an overdraft, or a personal loan where the money is credited fast, preferably on the same day. An emergency like the car breaking down can happen any time. They tend to happen when you least expect. You need to carry out immediate repairs because otherwise you cannot get to work.

With payday lending, you can apply online. You just have to answer a few basic questions, and provide the vital information. With many lenders, you don’t even have to fax or send bank statements. You can complete the application in a few minutes. The approval process is equally quick. The money is transferred to your bank account directly. There is no other lending process that is so simple or so fast. Sometimes, you can get the money even on the same business day.

4. You Are Joining A New Job

There are people who are in a tight financial situation when they are changing the job, irrespective of how much the new job pays, or what they used to earn in the current position. Sometimes, it will take a while for the last pay from the existing job to arrive because the employer will have to settle everything. So what will you do in the meantime? Will there be enough money? It will be a while before you receive the money from the new job.

With conventional personal loans, the minimum repayment period is one year, which of course is too long because your situation is just temporary. You don’t want to stay in debt for a full 12 months. If you do not have a credit card, you have to apply for one, and it will be a while before you get it. Also, with conventional credit, they will first call your employer. This doesn’t work for you anymore. Your new employer hardly knows you. So, your loan application is likely to be rejected.

A payday loan works very well here. It’s just for a couple of weeks. You can pay back once you get the next paycheck. In the meantime, you will have the money to pay all those bills and meet your daily expenses.

5. You Are Self-Employed And Need Money For An Emergency

The problem with conventional loans is that, to get it, you must have a regular income or some form of stable employment. When you are applying, the creditor will usually ask you how you are employed, and you must also furnish the details of your employer. You must also mention the amount you earn every year. But the problem is, a lot of people are now self-employed, and this number is increasing every year.

The requirements are stricter for those who are self-employed. You might be asked to provide your tax income statement. Often, the minimum income requirement will be higher than those who are employed and are drawing a salary.

It is difficult for self-employed people to get a quick loan in an emergency as the extra documentation takes more time to process. In fact, the application time will also be longer because you must first organize all the documents. Self-employment can also be uncertain at times, because the money tends to come in fits and starts. It is rarely a stable flow.

There are some payday lenders too that require you must have a stable income or full-time employment. But there are those that require you to make some sort of income. You need not make any other benefits. Plus, the application and processing is always much quicker. So a payday loan is always the more practical option for those who are self-employed and are in an emergency.

6. You Have A Place And Need The Bond Money

Unfortunately, the housing market is often not a renter’s paradise. For instance, you may have to fight it out with many other prospective renters for the properties you are interested in. Once you have found the perfect place, you have to find the bond money to secure it. You are lucky if you get the bond back from your previous property just in time, so you can hand it over for the new bond. But not everyone is so lucky. There can be a delay because you usually get back the money only once you have left the property, so it is unlikely that you will have the money in time.

A payday loan can give you this money when you need it so that you can move into the new home. Budget correctly, and you should be able to able to manage your finances. It’s a debt you can live with, because it’s just for a few days. You can repay once the previous bond is released or after you get the next pay check.

7. You Suddenly Have A Vet Bill

A pet is surely a great addition to the family. But they will require extra care from time to time. Most people wouldn’t think twice about getting the best care for the pets. However sometimes, the financial situation does not allow this. What if the vet says your dog needs emergency treatment and you cannot come up with the few extra dollars immediately? You get paid only after two weeks, and the treatment cannot wait till then.

Your credit card is already maxed out. There is no time to wait for the personal loan. Also, these loans are usually for a larger amount, money that you don’t need because it makes you fall into a bigger debt. A payday lender can give you the money quickly. It’s just for a short duration, and thus perfect for you in this situation.

Is a Payday Loan Right for You?

These are just a few instances where a payday loan might be the only practical option for most people. Please remember, there can be many other situations as well.

The fact is that, a payday loan is a good option in most situations, which is why so many people in the United States are asking for this kind of loan. Conventional loans give you a lot more money that you may not need. You will stay in debt for a longer duration of time, and have to repay more. The application and processing time may take several days, even weeks.

A payday loan, on the other hand, gives you just what you need to see you through till the next pay check arrives. You are never in debt for months. Repayment is easy because the amount is small. Most importantly, you get the money deposited directly into your bank account almost immediately.

You will have the money when you need it. That is critical in an emergency.


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