Traditional personal loans are a brilliant way to get together the cash you need to finance expensive projects or items. Renovating the kitchen, adding an extension to your house, buying a computer, and paying for a big wedding all cost a lot of money and you may need a long-term personal loan in order to finance them. However, when you need to borrow just a few hundred dollars to pay an unexpected bill, which you will then be able to pay off in full on your next payday, personal payday loans can be more suitable. You can borrow as little as $100, have access to that money within hours, and there are no credit checks.
If you do not need to borrow thousands of dollars but require the money you do need urgently, personal payday loans could be for you. They were created to provide a short-term solution to one-off financial needs. For example, say you're stuck with a bill from the garage after your car died on you unexpectedly and you need to pay for parts and labor. If you are only just making ends meet, an additional bill on top of all your other bills will be very difficult to pay. If you know that you will have the money to pay the loan off in full upon your next payday, personal payday loans can allow you to meet all financial requirements and not default on any payments.
Of course, because of the short-term nature of the loan, personal payday loans do come attached with high interest rates - the lender needs to be certain that even if you do default (and as no credit checks are performed, you are perceived as a risk), they will get back at least some of their investment in interest. However, as you are expected to pay the loan back in full within 2-4 weeks, the actual amount you will pay in interest will be lower than if you had a long-term loan and were paying interest month, after month, after month. This is an added incentive to pay personal payday loans off on the specified date, otherwise not only will you have to pay penalty fees for defaulting, you will have to pay further interest. It should also be seen as an incentive to try to start saving some money each month. If you don't want to be in the situation where you need to borrow money to pay the bills, putting aside even a few dollars each month can help gradually build up a pot so that the next time the unexpected happens, you're covered.
It is important to remember the purpose for which personal payday loans were created - to provide a short-term solution to a one-off, temporary financial problem. If you are in serious financial trouble, personal payday loans will only exacerbate the situation as you could very well end up in a cycle of applying for one after the other. If you only borrow what you need and what you know you can afford to pay back within a few weeks, personal payday loans could very well be your solution.
