Payday loans are just another
financial tool. You use tools when they help you accomplish a goal more
quickly, more easily and/or less costly than doing the job with other tools or
without tools. The fact that there is a Payday loans industry and it is growing
every day means that there must be some way in which the Payday loan tool
expedites the achievement of financial goals. For a payday loan there is only
one goal and that is to solve a short term cash flow shortage.
The Problem:
The problem that causes demand for
payday loans is that payment of bills is often on a different schedule than
paydays. The problem may be that your bills may be more than expected or there
may be a bill that was unexpected such as a car repair. The problem may be that
the last payday was smaller than expected due to sick days or bad weather
preventing you from going to work. The result is that for a short period (less
than 2 weeks or a month) you will spend more than you make in income.
The Standard Solution:
If you have some contingency
savings, you can borrow from them to tide you over. You make room in your next
payday to replace your contingency savings.
If you have no contingency savings
but you have a credit card with some limit room, you can borrow the money in a
cash advance from your credit card or line of credit and allocate money from
your next payday to pay that back.
If it is a matter of paying some
bills late that may be an option. There may be some late fees or charges but you
make sure that you allocate money from your next payday to pay the bills and
the extra charges. If you have certain bills set to be paid by preauthorized
debit you have removed this option from your financial tool chest. If it is for
the rent you risk upsetting your landlord by paying the rent late.
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