With the current government shutdown, government workers have started taking out loans and advances to support themselves during this difficult and hard time. Payday loans can be a blessing when emergencies like this take place, but it’s important to understand how they work.
Below I’ve created a mini-guide on Payday loans and how they work!
What Are Payday Loans?
A payday loan is a short-term loan that you usually borrow as an emergency solution when getting money from somewhere else is not possible. It’s usually a small amount of money that is given to you by a lender. What makes them what they are is the fact that they have to be repaid by the next paycheck – hence the name payday loans.
How Do I Apply?
Applying for a loan is quite easy and there are a number of ways to do it. You can do so by visiting a specialty store that offers them, or by applying online or via phone. If you apply in a store, you will have to return by the next payday and give the borrowed amount back.
When applying online, the situation is a bit different. Once your loan application is approved, the money will be deposited in your bank account. By the next paycheck, the borrowed amount, accompanied by the fee, will be taken back from your account.
When Should You Consider a Payday Loan?
The first thing you should know is that payday loans should only be used when you’re facing an emergency. For example, if you’re unable to cover your rent due to an unforeseen instance a payday loan could be your saving grace.
Did your car unexpectedly break down and you need it to get to and from work? A payday loan would be a good option for you. Home repairs also work as a reason to apply for a payday loan, especially if something as important as the fridge decides to die.
That being said, do not borrow one if you want a vacation, or for any non-essential purchases.
How to Borrow Responsibly?
If you decide to take out a loan, then you should keep in mind that borrowing responsibly may save you a lot of trouble. Debt is something you want to avoid like the plague, so responsibility is essential.
First of all, you should refrain from borrowing more than you need, because you may get higher fees too. You should also only take it out if you know for sure you will be able to pay it off next month. Lastly, make sure you know all the terms and fees for the loan before providing a signature.
If you don’t want to end up in an unpleasant situation, it’s important to know about payday loans, how they work, and when to consider one. Now, it’s up to you whether a loan could be the savior of your issues. If you find yourself in need of a loan, try Micro Payday Loans.