Using Payday Loans For Car Repairs

In terms of what to use payday loans for, the case of car repairs is just one of many of course. While in this article we’ll be focusing on the way that you can use them to pay for car repairs, the principles which are used can be used for anything else as well. We’ll start with how they work in general.

How Payday Finance Works

As payday loans are short term loans, the emphasis is on the speed of the loan, of getting the money quickly. This is possible because the payday lender is not going to need as much information as a conventional lender does. Which means it doesn’t take as long to get approved for the loan.

Banks ask a lot of questions, as you will know if you have ever asked for a loan from a bank. The reason they do that is because they are in the business of long term loans, a part of which is about predicting the future. Predicting whether you’ll be able to repay or not. Something that they use to make the prediction is your credit history.

It’s not necessary for payday lenders to make a credit check because you are only going to have one payment to make, when you are next paid. It is very uncommon for someone to default on a loan without making even one payment, so a credit history wouldn’t tell them very much. So this means that you are able to get the money quickly.

The way that payday loans work has a number of consequences on the way that they are best used. Since you have to pay them back so soon, and you can get them so quickly, the way that they are used is generally in an emergency.

Using Payday Finance For Repairing Cars

What we will now do is have a look at the case for using payday finance for car repairs. A number of circumstances will be used to show that it is not always appropriate to use a payday loan for them, it all depends on what the situation is.

When would be a good time to use a payday loan for car repairs? Well, it has to be an emergency so it would have to be that you need the car for something important, such as getting to work, first of all. Also, you would need to not have the money now, but you could afford it out of your next pay cheque.

What we’ll do now though is consider a slightly different situation, in which using a pay day loan might not be appropriate. For example, let’s say that you don’t need the car to get to work, in fact you don’t need it for anything important at all. You have shops within walking distance, maybe you work from home. Now perhaps you don’t have to use payday finance at all, you can just wait until next month.

Going back to the original situation though, let’s assume again that you do need the car to get to work. It’s definitely an emergency when it breaks down then. However you wouldn’t even be able to afford the repairs if you had next month’s pay. Again, it’s not a good idea to get a payday loan in that case as you’ll just end up not being able to pay it off on time.

There is a misconception that many people have that the interest rates on payday loans are high, which is only true if you don’t pay back on time. But that is like saying it is really expensive to drive because you can get speeding tickets. If you stay within the rules then there shouldn’t be a problem. And if you repay these sorts of loans on time, the interest charges are very reasonable.

To find out more concering the real rates of interest for payday finance check out Payday loans where David Morris regularly writes.

Comments are closed