When a Payday Loan is your last financial resort

These days of economic uncertainties, even salaried employees and wage earners can easily fall into dire financial stress to meet maturing obligations or sudden emergencies requiring unbudgeted funds.  Many have had to suffer pay cuts with shorter working hours and the result is predictably a compromise in the lifestyles they’ve known.  Much have been said about adjusting one’s spending habits according to your income.  But that is often easier said than done.  Moreover, it takes some time to adjust but there are obligations that can’t wait.

When a Payday Loan Makes Sense

Here are a few situations where a payday loan can make sense.  Be sure to assess your situation well enough before taking out that load.  While it may be an easy way out, it’s a temporary solution and not a long-term one if you do find yourself in perennial cash problems.

•       An extreme emergency like a sudden hospitalization or death in the family may leave you no choice but to take out a short-term loan if something like that should happen in between paydays or when you find yourself short of cash.

•       An appliance or equipment you can’t live without is busted and you need to have it repaired or replaced right away.  This can justify taking out a loan, especially if your appliance is used in a home business to augment your income.  Assess if the income loss during the period is much higher than the interest cost of the loan.

•       House repairs can be called an emergency if waiting till next payday will expose you and your family to unnecessary dangers while at home.  Natural calamities like earthquake or hurricanes can damage certain house sections where timely repairs are needed.  But that may tax you finances before the next payday, so getting a short-term may be your only recourse.

•       If you suddenly find yourself facing a bill that require immediate settlement due to arrears you may have overlooked is a good reason to take out that loan.  See if you can defer the payment until next payday.  Check out its late payment and other surcharges, or reconnection fees if they happen to be utility bills. If they will cost more than the interest of a 2-week payday loan, then it makes good sense to get one.

•       If you need to augment your pay check for a major purchase or settlement that can’t wait until the next payday, advancing a portion of pay can be your answer.  You don’t have to secure a loan against the entire amount on your paycheck though. Bear in mind that you’d still need your paycheck to survive the period before the next payday.

Do a little Math

Whatever reason that makes a payday loan an appealing way out of your financial predicament be sure to do some due diligence by checking the source of your loan and how much they charge against what other sources do. Seek advice from colleagues and friends who know and a little comparison shopping won’t hurt or take that long and can give you the peace of mind on maturity date.


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