When faced with an emergency situation of needing money instantly, you may find yourself without access to any funds. Perhaps you have no credit or it is at its limit; your checking account is low, and you do not want the embarrassment of asking a friend or family member for a loan. One option which is immediate and can provide the necessary funds is a cash advance payday loan.
A payday loan is simply a short term loan which you will repay on receipt of your next pay check. In order to secure such a loan certain criterion apply. You must be over eighteen, be an employee who can produce current pay stubs, and have a current and active checking account with a bank. A payday loan can be arranged with no collateral, no advance fee, and without your credit history being relevant. This makes it suitable for those with a bad credit history who would be turned down for regular credit.
The downside of a payday loan is the high interest applied, which in general would average about $25 for each $100 borrowed. The loans are usually for a short term period of about 2 weeks. The funds can be deposited into your bank account and then withdrawn electronically on the due date. Some prefer to cover the loan with post dated checks. They should never be recommended for anything other than emergency use.
However, payday loans are quite controversial with many disapproving of them, using the argument that they exploit the poor. In some states they are not allowed. If they are used sensibly they can be useful for emergency situations, but not as a regular method of dealing with finances. Never borrow more than you absolutely need, even if it is offered to you.
A borrower should take the time to research the loans available, which can be done online. To protect themselves the borrower should ensure that the lender is certified, and that all the terms and conditions of the loan are read and understood. Make sure there are no upfront or hidden fees, and know exactly how much you will be repaying when repayment is due. If the borrower takes these sensible precautions then using a cash advance payday loan for an emergency could save money on the emergency situation. For instance if a utility company is threatening to disconnect one of your services it may well be prudent to avoid that happening, as the late payment to the utility company, plus the reconnection charge, could cost you far more than the short term interest on a payday loan.
If you do find yourself in such a financial emergency, then as long as you are aware of all the details regarding a cash advance payday loan, plus the actual cost, then it could be sensible to use one. If you are already in so much debt that there may be a problem when it comes to repaying it, then it is not the solution for you.