Are Same Day Payday Loans Right for Me?

same day payday loansAre Same Day Payday Loans For Me?

Often, the money we make barely covers our daily expenses. Sometimes we have little or nothing left to cater for emergencies. If you are in this situation, you experience a financial crisis whenever an unplanned expense beckons.So what do you do when you are struck by an unplanned $400 car repair expense? This is where same day payday loans come into play.

Payday loans, also known as cash advance loans, offer you a way out. There are online services that can provide you with a payday loan of $400 in about 30 minutes for you to pay your emergency expense. Then all you’ve got to do is pay back the money on your next payday with a small or moderate interest. You’re not obligated to pay back the entire portion of the loan, on your next payday, however, you may want to. Reason being, is that interest can add up, quickly. The obvious goal is to repay the loan as quickly as possible, so if you can afford to pay it all back with the next paycheck – do it.

Though losing that amount from your next paycheck will suck (let’s be honest), that loan provided you the relief you needed, when you needed it the most. If you’re suffering from consistent cash shortfall, then same day payday loans may be for you. However, if you have other alternatives like borrowing money from friends, we recommend considering them before taking out a payday loan.

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How are Same Day Payday Loans Different from Bank Loans?

Payday loans have that name because the loan repayment is typically due on your next payday. If you cannot repay the entirety of the loan with your next paycheck, you should communicate this with whichever lenders network you decide to borrow from. These types of same day loans are different from bank loans in the sense that:

  1. Given in Smaller Amounts

In states where payday advance loans are legal, there is a limit on the amount you are allowed to borrow. In most places, the cap ranges from $300 to about $1000, in which case $5oo is the amount that is commonly borrowed. There are some reputable lenders that will provide these types of loans in much higher amounts, however, those loans will generally take 24 hours, to get the funding deposited into your bank account.

  1. The terms are shorter

Bank loans can last as long as you want, but as for payday loans, you have to pay when you get your next paycheck. This means that in most cases the loan term is about two weeks minimum, a month maximum. It's because of this, that these loans can offer a viable means for having cash till payday.

  1. No Installments Required

Bank loans allow you to pay back the loan in installments. However, with payday loans, you can only pay back the whole amount including interest and principal. Therefore, if you have a tight budget, payday loans may not always be the best for you.

  1. High Interest

When it comes to bank loans, the interest highly depends on the type of loan you are getting and the credit rating. However, for payday loans, the interest rate charged is the same for all borrowers (because it’s not based on your credit score). So if you borrowed $500, the interest cost is $75. I know what you’re thinking, that doesn’t sound so bad right? Well, wait until you realize that the loan term is too short. This is why the goal is to pay off the loan amount as quickly as possible.

  1. No Credit Check

Before you take out any mortgage or loan from the bank, they always have to check your credit so that they can figure out how much they will charge you. This is why people with poor credits are not given loans. With payday checks, you don’t need great credit, good credit, or any credit.

All they require from you is proof of income, a bank account, and an ID to show that you’re a United States Citizen and above 18 years of age. With these requirements, you can walk out with your same day payday loan in less than one hour. Which is why these loans are best for financially desperate people.

  1. They Have Easy Renewals

With same day payday loans, you can request to renew your loan if you can’t afford to pay it back on time. All you’ve got to do is pay an amount equal to the interest you owe, and you get another two weeks to pay it back but with another interest payment.

In the states where this kind of arrangement is not allowed, you take out another loan to cover what you already owe. This is why some borrowers might take months to pay off what was meant to be a two-week loan. Be responsible with your loan.

  1. The Repayment is Automatic

Taking out a payday loan requires you to give the lender a signed check or other documents that allow them to take out money from your account. So if you fail to repay the loan when required, the lender either withdraws the money from your bank account or cashes the check.

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Common Reasons Why People Consider Taking Out Same Day Payday Loans

  1. Inability to Get a Bank Loan

Bank loans are not easy or stress-free to get mainly because you might end up taking months to appeal your lender’s decision or finalize. Since same day payday loans are easy to get, they could help you keep your current financial situation going.

  1. To Pay for Unexpected Emergencies or Auto Expenses

Unexpected expenses are mostly auto repairs, car accidents, medical needs, or other emergencies that weren’t planned for. Such costs tend to impose financial burdens. In most cases, you don’t have the money to sort them out and some you may not be prepared to pay.

Most trusted payday loans online give you the opportunity to take out same day payday loan that will help you cater for that emergency medical bill, purchase, or service as long as you managed to pay back the loan on the required date.

  1. When a Family Member or Friend Needs Money

Sometimes the people closest to us find themselves in sudden predicaments. If for whatever reason they may not be able to apply for same day payday loans and have no money to use, then you might decide to take out the loan and help them out.

  1. To Cater for Everyday Bills Like Rent, Utilities, and Groceries

Studies have shown that the average borrowers of payday loans mostly use it to cover daily recurring expenses. Recurring expenses like groceries, utility bills, credit card payments, and rent require instant availability of cash. These payday loans help people experience consistent cash shortfall to stay afloat without having to cut back on other extraneous expenses.

  1. Because Payday Loans Don’t Require Credit Check

For people with no credit or bad credit, payday loans are the most straightforward way they can get instant money. The fact that these loans require no credit check make the widely used and desirable because they are not based on credit history.

  1. To Pay Off Credit Card Debt

The many threating letters and multiple phone calls credit card companies flood you with can be very frustrating. Taking a payday loan can help you get the collectors off your back for a while. If you have exhausted other cards and you still need to keep up with current payments and bills same day payday loans become your easiest means out.

  1. To Clear The Cost of a Bill or Debt That Could Cost More if Missed

In some cases, missing loan payments can result in the repossession of goods like significant appliances or substantial penalties. In case you have such a loan, you may find it easier to take out a payday loan to clear that payment first.

  1. To Avoid Borrowing Money From Family and Friends

Sometimes we have too much pride to ask for money from the people closest to us. If you find it tough to borrow money, payday loans might actually be what you need. The loan allows you to settle your financial problems without having to drag your friends and family in the middle.

  1. To Make Time-Sensitive Repayments or Purchases

What do you when you just have to have something that suddenly came out, but you lack the money? Sometimes when you find yourself in such a situation, a payday loan becomes the most accessible option otherwise saving up would take too long, and you’d miss out on the opportunity.

  1. A Payback Loan is Easier To Pay Back If You’re Financially Able But Need Extra Cash

Sometimes credit cards have ridiculous interest rates, and it becomes easier just to borrow money rather than use your credit card. Taking out a payday loan may actually be more cost-effective than using your credit card to make purchases.

cannot repay my loan

What Would Happen if You Can’t Repay a Payday Loan?

Even though online same day payday lenders don’t check your credit score or credit history with credit bureaus to decide whether you get the loan, there are specific consequences that crop up if you fail to pay the mortgage on time or fail to pay it at all.

First of all, the credit bureaus will probably hear about it if you fail to pay the loan and that will damage your credit score. Even though the lenders may not report you to the credit bureaus, the collections agency would. The organization may cut their losses and report you to the credit bureaus.

In most cases, the online payday lenders and storefronts tend to do their best to get collect the loan themselves since they also get a few pennies when they sell the debts. Therefore, the lenders may continue to withdraw the cash from your account. They may even break the amount into smaller amounts to increase the chance of the payments going through.

If both attempts fail, that will trigger bank fees against you. During that time the lenders start sending you letters from their lawyers, calling you, and even calling the personal references you gave. In some cases, the lender may try to have a civil negotiation to settle with you for some part of the loan you owe.

If any of the steps fail, the payday lender may outsource the loan to debt collectors in about 30 days. The debt collector might either file a civil suit or report you to the credit bureaus if the amount is large enough.

In case of a lawsuit, the court judgment remains against you for seven years and can further lead to a garnishment of wages and seizure of your assets. Every loan has its consequences, so we advise people to consider alternatives before deciding to take out a payday loan.

same day payday loan alternatives

Alternatives for Fast Cash

To avoid legal consequences and lousy credit histories especially if you are not financially well off. Here are some of the other possibilities you may consider:

  1. Budget Better

Most borrowers’ excuses for taking out payday loans is the fact that they had to bills to pay and they were behind payments. However, payback loans only act as a bandage for a short while. The best means to fix most of your problems is to budget wisely. Learn to leave within your means.

Take a hard look at expenses like food, rent, and utilities and come up with a better household budget. Figure out how much you can afford to spend on each of them. Trim some of the hidden budget busters and get in line with your monthly income.

  1. Utilize Emergency Assistance

Sometimes, even though you trim some expenses from your budget, it’s still difficult to make ends meet. There is no shame in asking for assistance. There are community organizations and churches that provide short-term help with food, rent, utility bills and other emergency needs.

There are also government programs that can offer assistance with housing, healthcare, food, and utilities. Before taking out a payback loan, consider emergency assistance options.

  1. Have an Emergency Fund

There are certain expenses like car failure, house fires, and other accidents that you can’t possibly plan for. One may never be sure what disasters will strike. However, you can prepare for them by building an emergency fund.

Set out a little money out of every paycheck and put it aside for emergencies. This will allow you to be able to deal with unpleasant surprises that may befall. The more money you set aside, the more natural dealing with sudden disasters will be.

Other alternatives including:

  • Borrowing from family and friends
  • Using credit cards
  • Going to your bank
  • Collecting your paycheck early
  • Pawn or sell your possessions
  • Dealing with your debts

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Final Thoughts Regarding Same Day Payday Loans

Unless you are in a tight situation and you feel that taking out a same day payday loan is the best option for you, we advise considering other possibilities of getting fast money. If you do need to take out a payday advance loan, ensure that you have a job, an active checking account, above 18 years of age, and that you're a US citizen or a permanent United States resident.