A Guide to Payday Loans

Posted on Posted in Financial

While it would be wonderful to have enough money to handle unexpected costs, that’s not the case for everyone. In some cases, a person may need to borrow some money for an urgent need, and that’s where an installment loan can be a viable solution. Here, potential borrowers can learn more about payday loans.

What is a Payday Loan?

A payday loan involves borrowing a certain amount of money and paying it back, with interest, according to a predetermined payment schedule. Such loans are unsecured because the borrower doesn’t have to put up collateral. Rather, the lender uses a borrower’s credit history and other factors to determine his or her eligibility. Read on to learn when payday loans can help.

Debt Consolidation

It can be difficult to handle multiple debts with different creditors. Each debt has a unique interest rate, due date, and monthly payment, and it’s easy for a borrower to become overwhelmed. By getting a payday loan, a borrower can use the money to pay creditors and be left with a single payment to make each month.

Paying Off Credit Cards

Similar to debt consolidation, a personal loan can make it easy to pay off credit cards. While a borrower may not have different sources of debt, a payday loan is a good option even for those with a single credit card balance. Using a payday loan to pay a credit card can be a good way for a borrower to avoid high interest and other fees.

Medical Expenses

It happens more frequently than one may imagine. A borrower encounters a medical emergency, but they lack the funds to pay for a procedure. Here, an installment or payday loan can allow the person to get the treatment they need while paying the loan off in a budget-friendly way.

There are numerous reasons for borrowers to consider payday loans, and a few are listed here. Each person’s financial health and credit rating will affect the interest rate they’re offered, but it’s possible that the lower rate can help them handle all the situations listed here along with others. The list of payday loan benefits is continued on the MoneyBoat website.