Anyone as an adult surely realizes the existence of loans as a way to manage their financial situation. But treading these waters can be tricky considering the number of hungry sharks and predators out there trying their best to milk their debtors’ worth.
This is especially true for same-day payday loans. Just hearing the same-day slipped in there would make it appealing, but of course, as with everything in life, there is an inherent risk attached to it. But before we get into that, let’s understand what payday loan even mean to begin with
What is a Payday Loan?
A payday loan, sometimes called payday advance or salary loan is a short-term, unsecured loan that’s often accompanied by a high-interest rate.
This loan refers to when the borrowers write the necessary checks to the lender for their payday salary while receiving a part or, a sum of that money immediately from their lender.
Is it Worth it?
Now that we’ve understood what payday loan means, the question of making same-day payday loans worth it of course appears in our mind.
While there’s no clear-cut answer for this question, there are scenarios where same-day payday loans would be worth it for you to consider. Say your family is facing a financial emergency, a same-day payday loan would give you breathing room until your next paycheck.
That being said, you will most likely pay for that exact convenience. As we’ve mentioned before, these loans have a high-interest rate, spiking up to triple digits in some cases. As such, it’s not uncommon for these same-day payday loans to have an APR (annual percentage rates) of almost 400%.
These lenders will also often advertise their same-day funding as their big selling point, but of course, that’s not what they are. It’s still fifty-fifty whether you’ll get your cash the same day you’re approved, seeing that it always varies by lenders.
When Should I Consider Same-Day Payday Loans?
Now to get more into details, the only time someone should ever consider using payday loans is when they’ve exhausted their other options. And even then, there are pros and cons that you need to be aware of before you make that decision, such as:
Despite being the less-than-ideal solution for most people, same-day payday loans can and will have some benefits that may or may not matter to you, starting from thins like:
Fast cash when you need it the most
The entire selling point and the idea behind this loan are to get them as fast as possible. So, for things such as a medical emergency, or other unexpected, last-minute issues, a payday loan, can potentially get you through until your next paycheck comes through.
Due to the nature of it being an unsecured loan, there’s no need for you to offer up your personal property such as your car or another valuable item as collateral for the loan.
No worries about the bad credit.
As unfortunate as it is, there is someone with bad credit on their marks, and we all know that lenders often check for a good credit score to be approved. But thankfully, some same-day payday loan lenders out there don’t check them, so there’s at least still a chance for people with bad credit to be approved compared to other types of loans out there.
While this one bullet point will differ depending on your state’s law, it is still an important point to raise. Borrowers get the option from applying at a storefront like a regular loan, or they can even do it online. Again, it differ from states to states, but another option is never a bad thing in our book.
Now that the fortunate and good things are done, here comes the less fortunate things about this world of same-day payday loans that all of us need to be careful about.
High fees and annual percentage rates
We’ve briefly touched on this subject above, but people might skip over it accidentally, so here we are again warning you about the innate high fees and rates that come with same-day payday loans.
These lenders often advertise their low-low fees and all of that, and of course, they do because it can skyrocket into an absurdly high interest rates, and they’re fully aware of that. A 400% APR for some two-week loan is something that most people don’t want to deal with unless they have to.
Debt cycle potential
Same-day payday loans can potentially drag you down a debt hole that’s difficult to climb out of. Seeing the fact that 80% of payday loans get reborrowed within a month, you may end up paying more fees than what you’ve borrowed, to begin with. So, again, be careful and consider all of these factors in your decision.
Bad for a long-term solution
Borrowing a loan, in general, is never the good, best thing that any adult should do, and this of course applies to the same-day payday loans that we’re talking about right now. As such, always have emergency funds that you can use when unexpected issues such as health come up. Because if loaning cash becomes a habit of yours, it will end up with you in debt that will be hard to recover from as we’ve mentioned above.
So, in conclusion, same-day payday loans, while they may seem intriguing and appetizing, it’s not as magical as one would’ve hoped. And the answer to the question of is same-day payday loan worth it or not depends entirely on you as a person.
If it’s a last-ditch straw that you need to get through until your next paycheck, then payday loans can indeed become your savior, that being said, depending entirely on it without any emergency saving fund for long-term use is definitely not something anyone should do.
That is all for this article about same-day payday loans for today. Thank you for reading this article, and we hope that this help gives you more insight as to whether a same-day payday loan is worth it or not. See you!