There may come a time in your life when you’re faced with an emergency expense that you simply cannot afford due to low income or unemployment. And it can be worrying, especially if you’re not sure where you can turn to. This is where online payday loans can help.
Whilst these loans should only be used to deal with an emergency, like a medical bill, or urgent home or car repair, they can be helpful to bridge short-term gaps in your income, so you can reduce financial stress, and deal with the unexpected. Below, we’ll take a closer look at these loans and how they could help you.
What is a payday loan?
You may have heard of payday loans, but how much do you know about them? This type of finance is most commonly offered by online lenders as a short-term solution to be used in an emergency.
These loans are typically smaller amounts of cash, from around £100, that must be paid back on the borrower’s next payday. These loans have become increasingly popular over the years to help bridge short-term gaps in finance that your income may not stretch to cover.
How can they help in an emergency?
So, why are payday loans so popular and how can they help you deal with an emergency? Here are a few benefits of this type of finance:
Quick and Convenient
The application process that comes with payday loans is quick and easy. Unlike traditional lenders like banks, online lenders allow you to apply for a loan to suit your needs from the comfort of your own home.
You may be asked for information including proof of income, as well as bank details and ID to help your lender make a decision and to ensure you’re able to pay the loan back, but you can do this quickly, at your leisure, so you can see money in your bank account as soon as possible.
Fast Access to Funds
Payday loan lenders are different to other types of traditional lenders as they can guarantee money will be deposited into your bank in as little as a few hours depending on the lender you choose. You can choose from a variety of loan types, such as same-day loans and 24-hour loans which are suitable for those dealing with a time-sensitive emergency.
Minimal Eligibility Requirements
One of the factors that draw many of us to payday loans is that they have more lenient eligibility requirements than traditional bank loans.
Payday loan lenders base approvals on whether you can afford to pay back the loan amount you choose, which means those with less than impressive credit scores, or that have struggled to pay their bills in the past can still benefit.
Whilst payday loans should only be used for emergencies, you can decide what you need it for. For example, you could use it to pay a utility bill that cannot wait, an urgent vet bill, or to repair your faulty boiler in the height of winter.
Whilst ensuring you only apply for payday loans when you find yourself with nowhere else to turn is essential, they can help you bridge the gap when your income will not stretch to suit your needs.