There are many different assumptions that are made when it comes to certain loan types and it is really wise to make sure that they are correct. You will find that you might have an idea about how a certain loan works or who it is for or when it should be used but it is wise to ensure that you are correct. Without studying loans in a lot of detail we could be making assumptions about them which are just not right. It is therefore wise to make sure that all of your questions are answered so that you can be completely sure of everything. This is important because if you are in the situation when you do need a loan, you need to know what your options are.
Payday Loans for Emergencies
Payday loans were designed to be used in emergencies. They were first brought out in order to help people with emergencies. It was seen that there were those that needed money quickly but because they had a poor credit record, it was difficult or impossible for them to get the money that they needed. Therefore, these lenders decided to fill that gap and to offer them loans. They recognised that they needed to be available quickly and so they are often available within a few hours, although this will vary depending on the lender. Lenders will also often be available to borrowers outside of normal banking hours which means that it is possible to borrow money at night or over the weekend which is something that other lenders do not offer and can be very helpful if money is not available elsewhere.
Other Uses for Payday Loans
So, it is obvious that payday loans are for emergency use however, is their use limited to emergencies? The answer is probably not. This is because the loans can be used for any purpose and they do have some differences compared with other types of loans which it is worth noting as these could make them suitable for other purposes. The first thing to note is that they are available to those who have a poor credit rating. If you do not have a good credit rating, you will be turned down for loans from some lenders. This is because they will not feel that they can trust you to make the repayments and therefore you will have to find a lender that can provide you with a loan regardless of your credit rating. You will also find that with a payday loan you will not be able to borrow a large sum of money. The maximum that you can borrow is £1,000 and this means that it can be useful for people that want to borrow smaller amounts and do not want to feel overwhelmed with a large debt. The loan also needs to be repaid very quickly. It gets paid when you are next paid which could be a few weeks or days. This means that the debt will not be hanging around for very long, which can be a relief for those that do not like the idea of being in debt and owing money for a long time.
So, it is good not to think that payday loans are only suitable for one thing. You may find that you are in the situation where you have a poor credit record and want to borrow some money and therefore this type of loan could be useful to you. Therefore, it is wise to keep it in mind just in case. Also, if you only want a small sum of money or to borrow for a short amount of time then it can be useful.