Payday loans are a temporary short-term loan, which is available to people who need money to help them cover unexpected costs before they are paid. Also, they are normally smaller loans than you might be able to get with a more traditional high street lender. So, what are the most common reasons that people take out payday loans?
To Avoid Going Over Their Overdraft Limit
Going over your overdraft can be a costly option for many people, so this is why you might opt for a payday loan instead to cover your expenses.
To Pay For Bills and Avoid Paying For Late Fees
We all know how stressful it is if you get an electricity or water bill through and it’s much higher than you were expecting. It makes you wonder how you’re possibly going to cover the costs before you get paid. Taking out a short-term loan can help to ease the strain of costly bills to help until you’ve got some money in the bank.
To Cover Costs When Things Stop Working
Another common reason that people take out these loans is to cover the costs when things just aren’t going your way. Let’s say for example your car suddenly breaks down and needs repairing or if your washing machine packs up, these are things that need replacing as soon as possible. This is where people might take out a payday loan, to get the cash quickly to get them back to normal as quickly as they can.
Other Emergency Expenses
Things don’t always go to plan, especially when it comes to our money, like emergency medical or dental treatment, or even a costly vets bill. This is where the payday loan comes in handy for these situations.
To Pay For Holidays or Weekend Breaks Away
Now people have begun to get more familiar with the concept of the payday loan, they have started to not just use them for emergency situations. They have also started making use of the loans service to cover the costs of things like a well deserved weekend away or even to pay for wedding or birthday gifts.
Not Right For All Situations
Although these types of loans are great for many different circumstances, they aren’t right for all situations. Before signing up for any kind of loan, it’s probably a good idea to ensure that you have considered all of your options. Also, when searching for a payday loan, check out their repayment costs and repayment plans to make sure you get the best deal for you.
Can you take out more than one payday loan at a time?
Yes, taking out more than one payday loan is something that is possible, but it isn’t recommended. As we compare your application with many of the top lenders in the UK, there is a chance that you could be approved for more than one loan. Despite this, payday lenders encourage responsible lending, so we want to make sure that you only borrow what you will be able to pay back. If you take out a second loan, it will only make your situation worse.
If you have had a horrible string of bad luck, meaning that you just don’t have the cash to last you until payday, it could be very tempting to try to take out multiple payday loans. If you do this and then find that you can’t pay the loans back, then it could damage your credit rating and make your financial situation much worse. So, it’s probably a good idea to think long and hard before taking out any additional loans, as there could be other ways to solve your difficulties.
If you have found yourself in a position where you have more than one payday loan, then you have a few options.
If you think that you might not be able to repay your loan, then it might be a good idea to try and get in touch with your lender to see if they can arrange any different payment plans.
Another alternative is to try to get in touch with a debt professional, who should be able to advise you on the best ways to manage your debts to try and ease your financial difficulties.