- Mike Amado from Monily
Filing for loans typically isn’t an easy thing to do. That is unless one opts for a payday loan which is known for its relative leniency in lending money. Unfortunately, the very nature of payday loans being easy to sign up for has inadvertently cultivated underserved notoriety. Unsurprisingly, payday loans are marked with a huge target for exploitation.
The truth is that payday loans aren’t as bad as some people make them out to be. It’s just a lending system, after all. The human factor muddies the reputation of legitimate lenders and borrowers.
Payday Loan Popularity
Payday loans and its alternatives and its variations have a controversial history. Eventually, sensible restrictions are set to ensure that neither party – the lender and the borrower – can easily exploit the other.
It’s no secret that a large number of people are aware of its existence. However, with its gained notoriety, people are hesitant to file for such loans. Those who did eventually end up loving the idea and – potentially – getting drunk from the thought of being able to borrow money that easily.
Nevertheless, whether if it’s infamy or positive recognition, it’s hard to argue that payday loans are quite popular. Even when compared to mainstream and large lending institutions like banks.
Although this model of money lending is comparatively volatile than ones provided by a bank’s bureaucratic process, it has its notable advantages. In fact, that in itself – the ease of loan approval – is one of its biggest strengths.
When To File For A Payday Loan?
Payday loans are nothing short of amazing because of its apparent leeway with regards to collateral. Of course, it’s never a good idea to indiscriminately file for one loan after another for the sake of taking advantage of its convenience. Here are example scenarios of when to approach a lending company with a payday loan offering.
A family member has gone ill. It goes without saying that falling ill, and worse, getting hospitalized for it, is one of the worst obstacles to a family’s financial security. Nobody can predict such scenarios. Even families with a stash for emergency medical expenses will find themselves to be in need of more money for treatment and hospital bills. Payday loans help considerably in such situations. In need of a new work equipment. There are a lot of people today who are working remotely. Initially, this may sound fine and dandy. Who wouldn’t want to work in the comfort of their home? In reality, this work setup has its glaring downsides. One is the fact that remote employees and freelancers typically have to buy their own equipment. Laptops don’t come cheap. Paying through installments is a financial curse. The more practical recourse is to opt for a payday loan and finance the item in cash.
When To Avoid Payday Loans
Conversely, there are scenarios that make payday loans impractical and downright ridiculous. Interestingly, because of personal bias, some are unable to tell that their reason isn’t justified. Here are some deceptive scenarios that some think are worth borrowing money for:
Buying an expensive engagement ring. What else goes with shelling out money for an extravagant purchase? A flash mob. This scenario, of course, is an obviously ridiculous one to fund for a loan. But – for some who are shot by Cupid straight into their eyes – all bets are off.
A moment of inebriated brilliance. It’s no secret that drunk people say the darndest things. Unfortunately, they do the darndest things as well. Approaching a lending institution for a payday loan is one of them. Fortunately, not all lending institutions are that lenient in approving loans.
Important Considerations Before Making The Decision
Having a good reason to borrow money doesn’t always mean that it’s sensible to actually borrow money. Other factors should be taken into account such as the capability to pay for the borrowed amount on the agreed upon date. If it isn’t possible, better not attempt to borrow at all. Lenders are running a business, not a charity, after all.
It’s also worth noting that there are lenders who offer 0% interest rates for initial loans. It’s pretty clear that anyone who wants to go for a payday loan should find one that does. Who doesn’t love a zero interest rate, anyway?
At the end of the day, payday loans are kept alive by the mutual respect of lenders and borrowers. Without stacks of paperwork binding the loan such as that of large banks, the trust lenders place on their clients is nothing short of commendable.
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