Managing your finances can be tough, especially when you’re hit with emergencies that you can’t afford. When facing these types of situations, a lot of people like to utilise third party finance to see them through. One example of this is payday loans. Plenty of people take these out when they’re in dire straits as they can provide them with a fast solution. But if you don’t know what they are, you might be wondering how they can help. If so, keep reading and find out what payday loans really are. 

How Do They Work?

Firstly, a payday loan is essentially a way to borrow from your wages in advance. When you need something in an emergency that you can’t afford until a payday, these loans allow you to access the funds you need. All you have to do is pay back the borrowed amount when you get paid, hence the name “payday loan”. So, while they can provide you with a quick solution, you need to be prepared to pay it all back when you get paid. 

How Much Can I Borrow? 

The amount of money that you can borrow when taking out a payday loan will depend on a lot of things. Firstly, your affordability will be assessed by the lender, as this will determine whether or not you can repay the amount borrowed when requested. The lender will also factor into how much you can borrow, as some will allow higher amounts than others. Most of the time, payday loans are used for smaller amounts that can easily be paid off. Otherwise, you’ll end up with none of your wages left after you pay it back. 

When Do You Use Them?

Ideally, you want to be using a payday loan for genuine emergencies. Things like your boiler breaking down in the middle of winter or your car battery dying overnight before you get paid. You shouldn’t be using these loans for frivolities or for things that you can’t actually afford in the first place. For instance, holidays, new clothes etc, are luxuries and not worth getting into debt over. However, if you do run into a financial emergency before you get paid, a payday loan could help you get through it without having to wait weeks on end to get the money. 

How Long Do They Take To Get? 

Payday loans promise a fast turn around most of the time because they know that people are using them in emergencies. Some lenders are even able to process your application and send the funds within the same day, so it can definitely be worth looking into if you need emergency money quickly. Most of the applications will be completed online too, so you won’t even have to leave your house to complete the process of getting a payday loan. 

Payday loans might be something that you’ve never heard of or perhaps even considered, but they can be useful in certain situations. From car troubles to broken heating, there are lots of different moments in life when we don’t have the cash until payday, but the problem needs solving now. With the help of a payday loan, you could get the money you need instantly and clear your debt off when your wages come through. So, now that you know what a payday loan is, you’ll be armed with more knowledge of the finance options out there that are available to you.