There are lots of situations when we might need to borrow money. There are also lots of loans that we can choose form. It is important to choose the right loan at the right time. This is because we will then get the best value for money and the best possible borrowing experience. So, knowing when might be a good time to use a payday loan, will help us to decide whether it is the right for us in a particular situation. Although there are no restrictions as to when we will be able to take a loan, there are certain circumstances when it could be suitable but obviously you should always compare it to your other options as well so you can be completely sure that it is the right choice for you to make.
When Your Credit Report is Bad
If you do not have a good credit report then it can reduce your borrowing options. There are many mainstream lenders that are not interested in lending to a person if they feel that they cannot be trusted to repay the loan. This was the reason that payday loans were set up as it was noticed that there were people that could not borrow money when they needed to. So, payday lenders do not restrict borrowers with regards to their credit score. They will lend to most people even if they have a poor credit record. This means that if you are ever in the situation where you have a poor credit record and you need to borrow money, then they could be an option worth considering.
When you Need Money Quickly
A payday loan can often be arranged very quickly. They will often be done within a few hours of applying. This means that if you need money in an emergency, then they can be very useful. However, it is important to bear in mind, that you will need to think about the fact that lenders will differ in how long they take and so if you need to guarantee that you will get the money quickly, you will need to contact them to see how long they will take. You may also find that some will lend money outside of normal banking hours which could be useful if you need money overnight or at the weekend, so it can be worth finding out who those are.
When You do not Need to Borrow Much
With a payday loan you will be offered between £100 and £1,000 and often, if you are a first time borrower, you will only be able to borrow a few hundred pounds. This means that if you need to borrow a significant sum of money, then this loan will not work for you. However, it can be really handy if you want a smaller amount of money as this is not often offered by other lenders.
When You Want to Repay Quickly
A payday loan needs to be repaid when you next get paid. This means that it will only last for a few weeks and so you will not be in debt for long. This can be handy if you do not want to owe money for long, perhaps because you do not like being in debt.
When you Can Afford to Repay it
It is also really important to make sure that you can repay the loan before you take it out. Find out how much you will need to repay and when. Use this information to calculate whether you will have enough money to repay it so that you only take it out if you can afford it. It is really important to do this and make sure that you are prepared. If you do not repay on time you will have to pay extra fees which will not be good.