Is Getting A Payday Loan Necessary

In times like these when an average human being tries to live from one paycheck to another, it is usually inevitable to get a payday loan, especially when earning is low. Usually popular among low-income families as a source of short term financing, these payday loans are normally used to make small payments before the next paycheck is received. It may become necessary to get a payday loan if an unanticipated event occurs; for example, you may need some advance to fix a broken car, help a friend or pay for medical treatment. Since these little loans are easy, convenient and quick, they are tempting at first but may prove to be dangerous for people who happen to develop a habit of getting these loans every now and then.

Getting the Loan

Getting this loan is fairly simple requiring a few simple steps and getting the money in a matter of days instead of weeks. Generally, these loans are used for emergency situations when getting a loan is inevitable and you cannot wait for the next paycheck. However, these loans have a few downsides only if you borrow more than what you can safely return.

Downside for Habitual Lenders

Since they are convenient and easy, lenders charge higher interest rates on them. Interest charges usually vary from 15 to 30 percent of the borrowed amount. When compared, the annual percentage interest rate turns out to be nearly 800 percent. Moreover, since usually lower-income families with financial troubles rely on payday loans, they are unable to repay the loan on time. Even when paid on time after receiving the paycheck, they may find themselves short of cash to pay for their expenses, may issue another payday and may end up being caught up in a cycle of loans.


The best way to avoid getting a payday loan may be to create a monthly budget so as to keep a track of the amount being spent on expenses. Creating a budget may also help to highlight unnecessary spending. It is also necessary to try to save some amount from the paycheck every month so as to deal with any future unexpected occurrences.

You may also consider other options to fulfill sudden or unexpected requirements of cash such as getting a pay advance from the employer to fulfill needs. Such an advance does not have any interest. However, getting a pay advance every now and then may also risk the reputation with the employer and the employer may refuse any future financial assistance if it becomes a habit.

Final Words

All in all, payday loan is the best solution to get quick cash in emergency situations and there is no harm to apply for one. You just need to make sure you borrow as much as can be returned safely and you do not make it habit. Additionally, you can always look for creditors with lower interest rate.