Payday Loans: Good or Evil Power

Payday Loans: Good or Evil PowerDo you need extra money and no resources to get them? The majority turns to payday loans. Is it a good decision and what benefits or pitfalls to expect?

You can imagine various stressful situations when you need extra money and no resources to get them.

It might be expensive treatment or urgent repair expenses.

Unfortunately, not many people have savings in their bank accounts. As a result, in really difficult times, many folks try to find a way out of their financial difficulties by calling friends and relatives – which can cause harm to these relationships. 

As you might know, I am a recovered anxiety sufferer. I wrote a bestselling relaxation book called Instant Calm. Plus I founded the groundbreaking video course called The Anxiety Cure.

I’m committed to helping people to stay calm during stressful times.

So I put together this quick guide on payday loans – to help you to best determine their pros and cons – so you can move forward both more calmly and more wisely.

Payday Loans Lead to Financial Stability or Financial Gap?

There is an easy solution to avoid misunderstanding and spoil a good friendship.

Take a payday loan to cover the cost of emergencies.

Today everyone can do it via a mobile device.

You just need the Internet and a website where to apply to.

What Is a Payday Loan and Why You Need It

COVID-19 struck heavily on the financial side of life, and many families had to look through the options. The survey in Canada showed that 37% of people could not cover their expenses for one regular month. However, another survey among poorly paid workers displayed that those who had saved more than $400 tend to face fewer financial troubles than others. 

A payday loan is a small borrowing from the bank. For example, in Canada, the minimum sum is $100, and the biggest is $1,500. It lasts one-two weeks and allows you to cover urgent payments like rent, bills, and credits. And nearly 11% of people prefer to use payday loans to cover unexpected purchases.

How will you cover unexpected purchases of $500? The results of survey is below:

payday loans cover costs

Mostly, people find it quite handy because you can get it online and without any documents presented. With this magic cushion, you are able to get out of debt for a short time. 

Statistics show that this type of loan is popular between 25 and 44-year-old people. 

The survey identified about 45% of people who were taking it for emergency spendings.

And 41% of respondents said that they used the borrowed money to pay bills. 

Based on these facts, it is hard to tell that this type of borrowing has any risks involved. 

Benefits of Payday Loans

You can take pay day loan fast and without visiting the office. Submit the necessary data online. Some companies even have their own mobile apps. You do not need to wait for confirmation long; usually, it can be approved within an hour. 

It is a great way to start a credit history for youngsters because they would need it anyway for future purchases. If you already have a financial record but, due to inexperience, spoiled it, the loan is your chance to improve the credit rating. It won’t be better overnight, but it certainly softens the situation and has a positive further effect if you pay in time. 

If you successfully cover several payday loans, the company may provide you with better service by altering the agreement and offering you a lower interest rate. If you are 18 years old and have a regular salary, you can borrow some money. Keep to the schedule of payments, and you will have no troubles.

Drawbacks and Financial Gap

drawbacks financial gaps Payday Loans

If you decide to take a payday loan, be sure that you won’t miss any deadlines. The main issue here is that fees are so big that you can be deeper in debt.

It can be drawn as a circle where you borrow more and more cash to close old obligations. As a result, it is quite difficult to break it. 

Another factor: Payday loans offer much bigger percentage rates than regular credits.

Before applying to the financial company, choose the one with less overpayment amount. If you understand that you cannot pay in time, ask if the lender can prolong the due date, but here you would also have to pay an extra fee that can be smaller than a missed payment penalty.

Samuel Johnson once said, “Money and time are the biggest burdens in life. The most unhappy are those who have more of them than they know how to use.” It means that borrowing money is a serious business. You should always have a purpose for why you take loans. Sometimes it is unreasonable. If you try to support the way of life that you cannot provide on a regular basis, then this type of borrowing is not for you.

To Take or Not to Take a Loan

There are no bad or good loans when it comes to money management.

Put clear goals and answer a bunch of questions truly, like:

  • Why do I need extra money?
  • How long will it take to close debt?
  • Am I capable of returning the money back on time?

By fulfilling these steps, you will look at the situation cold-blooded. Of course, if you have an emergency, a payday loan would be a great opportunity to find and receive cash in no time. Millions of people already tried this option for multiple purposes. But only a third of them can maintain this scheme of life. The option is needed due to the financial difficulties that middle-class families can face.

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