Exploring Investment Strategies

Posted on: 28 March 2015

If you've received direct mail or seen TV commercials advertising payday loans, you may have paid little attention to them or even dismissed them as something you wouldn't want to pursue. While it's true that living within your means is a smarter strategy than becoming a chronic debtor, there are times when you must make an urgent payment faster than you can earn the money. In these situations, a payday loan can be genuinely helpful. Here are four reasons to give these loans more than just a passing thought.

1. Fast Turnaround

Getting approved for a loan can be a maddeningly slow process -- and that doesn't even count the interval between getting approved and actually getting your hands on the money. Even peer-to-peer loans can take a week or longer to make their way into your bank account. In an unanticipated crisis, you simply don't have that kind of time. 

This is when a payday loan can really come to the rescue. Whether you choose to apply in a brick-and-mortar loan office or from the comfort of your Web-enabled computer or mobile device, you might wait only an hour or so between submitting your application and getting the money you desperately need -- thus avoiding late fees on delinquent bill payments, utility shutdowns, or even an eviction.

2. Easy Approval Standards

Few things are more alarming and humiliating than applying for an emergency loan only to be turned down. Traditional institutions may reject your application for a variety of reasons. Even if you have a good overall credit score, for instance, you might be turned down because of one particular issue such as high credit card utilization or a few late payments.

Payday loans recognize that their borrowers are usually both in trouble and in a hurry, so they offer a simple, streamlined application process with minimal qualification requirements. Typically, your job is your qualification -- as long as you can produce pay stubs or other documented proof that you have steady employment, the lender will be satisfied that you can repay an unsecured loan once your next payday comes around (hence the term "payday loan"). You can also get a secured loan if you have a car or other collateral to put up.

3. Multiple Spending Options

Traditional bank loans are usually allocated for one purpose only, such as a vehicle purchase, a mortgage, or a home improvement project. But what if you're in need of funds two or more urgent issues? Applying for multiple loans can ding your credit score, which only hurts your ability to obtain such financial aid in the future. Each loan may be attached to a separate turnaround time, adding to your frustration.

When you apply for a payday loan, you don't have to worry about this problem. That's because a payday loan is simple doled out as a single cash advance. The lender doesn't care what you need it for, so you can take out one loan to pay for various things at various times. (It's important to note, however, that you should always pay a payday loan back as soon as possible to avoid accumulating substantial interest.)

4. Nontraditional Hours

While banks no longer close in the middle of the afternoon to reconcile their accounts by hand, most of them are only open for business until 5 or 6 pm on weekdays. They work even shorter hours on Saturdays and don't even open on Sundays. Unfortunately, reality doesn't bow to banker's hours. Crises can easily occur in the evenings or on weekends -- and when they do, you'd better have some way to get emergency financial assistance.

Payday loan companies fill the gaping availability hole left by banks and other traditional lending institutions. Their offices tend to stay open well into the evening, giving you an opportunity to obtain much-needed funds even after the sun has gone down. Some online lenders offer overnight service, processing nighttime applications and zipping the money to your bank account the next day. The ability to apply for payday loans online also means you don't have take time away from work to accommodate a bank's schedule.

Payday loans aren't ideal for every situation -- you can enjoy lower interest rates, for instance, if you have time to play the traditional lending game. But if you take out only the amount you need and pay it back promptly, you'll find that the occasional payday loan from a place like EZ Money can help you throw lifesaving water on those financial firestorms.