Wednesday, 26 October 2016

Are Payday Loans Really A Quick Solution In An Emergency?

Financial emergencies are always uncalled for. They arise at the times you least expect them. Many a times an already faltering debt account mounts up into a huge liability. And you are bound to borrow more to meet the outstanding bills. Such emergencies are most difficult to deal with.

Thus it important that you keep track of your credit accounts and know your loan status regularly so as to not enter a financial muddle ever in your life. Nevertheless, even under huge financial crunch when you already have too many bills to pay, you still have certain cash solutions such as payday loans to take shelter to.

What is a payday loan?
A payday loan is basically a small unsecured loan drawn for short-term. It is also known as payday advance, salary loan, payroll loan or a cash advance loan. Anyone who is employed and have a fixed source of income, can apply for payday loans. Though these loans are not very popular in India, but are picking up as they provide instant solution to your monetary grievances.

Why payday loans are looked at as a solution in the times of emergency?
Payday loans are perfect for emergency as they are quick, convenient, easy to apply for or get approved of, at the same time.
For example, during the times when you have excessive debts and too many accounts it is always advisable to close small, expensive loans first and get a consolidated loan or limit the number of payable accounts. However to do so, you would require immediate cash to re-arrange your portfolio.
In such case, small term payday loan would work like a magic hand. You can get the cash via pay roll loan within 24 hours. So pay day loans are the best bet when it comes to draw an untimely credit line.

You should resort to payday loans keeping following tips in mind:
1. Apply only when you are looking for a short term loan. The pay day advances should never be looked at for long run as these are very expensive loans.
2. Apply for these loans when you are sure about generating cash in the near future. You need to be confident of paying back on time as failing to do so could be very bad for your financial health. Indeed it can build a financial catastrophe if not planned well.
3. So, never go for payday loans casually. Only in the times of utter emergency resort to payroll loans.
4. You can apply for these instant cash loans at institutions other than banks too. For example, if your name is in loan defaulter list and you want emergency cash you can apply for payday loan from some financial institution or corporative society. So payday loans are available outside banks too.
5. If you are employed and have a salary slip you would get a payday loan easily. Usually the lender would expect you to payback as you get your next month’s pay. These loans do not drive a credit check or back ground check, only a payroll and ID proof would be required to apply for payroll loans. Thus pay day loans are one of the easiest loan options to apply for.
However many people question the legibility of payday loans. Are payday loans really a quick solution in an emergency or a worse option to opt for?
One of the major cons for payday loans are they are expensive loans to apply for. So before you resort to this quick loan in an emergency it is important that you also understand the nature of these loans clearly. These are not only short term easy solution in the times of emergencies but are one of the most expensive loan options at the same time!
If you are a bit hesitant to arrange for cash next month or have too many financial bills lined up, it would be better to not increase added burden of interest rate. Instead try to follow following tips to manage your loans:
1.       Have a budget and spend accordingly.
2.       You should resort to saving all the time.
3.       It is necessary to look for more and more avenues of income and save.
4.       Try to figure out expensive loans and get rid of them as soon as possible.
5.       Clubbing small loans into one umbrella loan is also a smart option as it saves your time to manage various accounts.
6.       You need to ensure that you do not miss a re-payment at any cost and keep paying back regularly as it would not only rid you of your debts but would also build a good history that would help you in future.
7.       A quick loan like payday cash advance should be an option to get rid of a liability instantly. You should be confident to fill that loan next month.

8.       If however you would want to avoid high interest loans you could consider peer to peer lending option too.

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