Emergencies happen when you least expect them, which means we’re not always prepared. And dealing with an unprecedented situation can be hard enough without worrying about how you’re going to pay for it. This is where payday and short-term loans can help. These loans give borrowers access to cash quickly, so they can stay calm and get their lives back on track. We’ll take a closer look at the benefits that come with using payday loans to help manage an emergency below.
What are payday loans?
A payday loan is one of the most common types of finance used to help the borrower deal with an emergency. As the name suggests, payday loans can help borrowers when their income doesn’t stretch to the end of the month, made more difficult by an unexpected expense. Generally, payday loans are used for emergencies like urgent home and car repairs, and even medical bills. They are offered by a range of alternative lenders and tend to have a repayment term of around a month. These loans could be a good option if a short-term financial boost is what you’re looking for. So, what are the benefits of using payday loans to deal with an emergency expense? Read on to find out more.
Fast access to cash
Emergencies are time sensitive, especially when it comes to urgent repairs or paying for medical care. This type of short-term loan offers access to cash quickly when you need it most. You can apply for a payday loan with an online lender, and if you provide the correct information they require, you could see the funds in your account by the end of the day. This is one of the advantages that make this type of loan stand out from traditional loans. The process of applying for a bank loan takes time, and several visits to the bank – not to mention several documents that you’d need to provide. With a payday loan, you can apply easily from the comfort of your own home, and benefit from the amount of cash you need quickly, in as little as 24 hours in some cases.
No credit check
Traditional loans are not accessible to everyone as banks have a list of requirements that you’ll need to meet for your application to be approved. One of the main factors that have an impact on whether your loan application is successful is your credit score. If you have bad credit as a result of struggling to manage your money and loan repayments in the past, bank loans may not be a viable option. Payday loan lenders base their decisions on affordability rather than credit score, so if you can prove that you can make your repayments, you can benefit from the emergency cash that you need – regardless of your credit history.
Easy application process
As mentioned above, payday loans boast one of the easiest applications when it comes to loans. Many payday loan lenders are based online, which means you can research, compare, and apply for a loan that suits your needs in as little as a few clicks. Online lenders may ask for information to help them with their decision, for example, proof of income and address, but provided that you supply them with the information they need, your application will be reviewed and approved quickly. In comparison, traditional loans take time, have strict approval requirements, and require trips to the bank. So, when it comes to choosing a loan to help you deal with an emergency, the choice is clear.
How to apply
If you’ve decided to apply for a short-term loan to help you deal with an emergency situation, knowing more about the application process is advantageous. Thankfully, as payday loans tend to be offered by online lenders, the application process is quick and easy which means you can apply from the comfort of your own home. Here are a few tips to help you when submitting your application.
Find a reputable lender: It’s essential that you review and compare lenders to ensure they are trustworthy. With many lenders operating online, it can be difficult to get a clear idea of the service they offer, and if they are in fact licensed and reputable. Look for customer reviews to get an unbiased view of the service they provide, and make sure you read the small print.
Check the criteria: Before applying for a loan, make sure you fit the criteria set out by your chosen lender. This usually includes minimum age, income, and where you live. You can save time and benefit from fast approval if you ensure you meet the criteria before applying.
Gather documents: There are a few documents your lender may ask for throughout the application process so collecting them and having them to hand means you can benefit from fast approval. Some of these documents include identification, proof of income, and bank statements.
Cost of borrowing: When you’ve chosen your lender, make sure you’re aware of the total cost of borrowing. This means the cost of the loan, the interest and any additional fees so you’re clear on the total you’ll need to pay back.
Apply online: Once you’ve completed the previous steps, and you’re sure of the lender and loan you’ve chosen, take your time to complete your application in full, being totally transparent and honest with your lender. Make sure you provide the information they require to assess and review your application.
Await approval: Now all you have to do is wait. Some lenders that offer emergency payday loans can approve your application in as little as an hour, and you may even be able to benefit from cash paid into your bank in 24 hours depending on your lender.
Payday loans can be incredibly helpful if you’re faced with an emergency that your income will not stretch to cover. Whilst you should consider both the pros and the cons, finding the right lender and loan amount for you means you’ll be able to deal with an unprecedented situation more easily.