There are a number of things which you have to consider when you are thinking about payday loans, most importantly that you can actually afford it. When it comes to actually finding a use for them, just about anyone can do that. But not all situations warrant using a payday loan of course.
Best Uses for Payday Loans
You can use payday loans for whatever you want, there are no restrictions put on this by payday lenders. Although having said that, a limit of around 1000 is often put on how much you can take out. Within that though, you could get anything from a toy car to a real one.
Actually though in both cases it would be quite rare to buy either of those. A toy car would generally not be expensive enough to need a loan for, and even if it was then it would rarely be an emergency to get one. On the end of the scale, a car is usually too expensive to get from a single month’s pay cheque, and isn’t often an emergency either.
Having said that though, one of the reasons that payday finance turns out to be so useful is because it is a form of financing which is very flexible. So you could imagine a situation when getting a toy car, for example, would be an emergency. If that is what your child wants for their birthday for example, and you don’t have the money for it (maybe it’s remote controlled) then that could be an emergency.
Getting a new car could also be an emergency. Let’s say, for example, that your current car has just been written off and you need a car to get to work. You can’t wait until you’re next paid to get one, so you have to get a cheap one right away. Then getting a pay day loan might be appropriate.
The principle that you can take out of this is that it only really makes sense to use payday loans when you are in some sort of emergency situation. If your child’s birthday isn’t for a couple of months, for example, then you could just wait until you’re next paid and then buy it. In that case it would make no sense to get out a loan of this sort.
In terms of the real car, if you’re not in need of one right away because you still have a car that works, then you’re not going to need to take out a loan for that. After all you would have to add the interest charges for the loan on top of the price for the car.
With that said however, there is actually one set of circumstances in which it does actually make sense to make use of a pay day loan, even if it is not an emergency. That would be when you come across a bargain which is time-limited and means that you are still saving money, even taking in to account the interest rates that you are going to be charged for taking out a loan. That is another time in which it would be good to take out the loan.
So in that situation, you wouldn’t be using the payday loan because you were experiencing an emergency, instead it would be a purely financial consideration. That kind of situation doesn’t occur too often though, that you find a bargain which exceeds the interest you would have to pay on the loan.
Although you should not construe that to mean that the interest rates that you are charged on payday finance are all that high. When you look at it in fact, as long as you repay on time, the amount of interest you have to pay on this sort of financing is actually less than you have to pay overall for a long term loan.