Are payday loans the best way to get cash fast?
When you’re short of cash in an emergency situation, speed is everything. We’ve all been in situations that require fast cash and when your current account is empty, panic can set in.
Payday loans or personal instalment loan can be a good option in these situations, particularly if you are employed, have a steady income, and can afford to repay quickly. However, are payday loans the best way to get cash fast, or are there better options? Here we explore short-term loans as a way to access quick cash, but we also look at some other ways to get your hands on cash when you need it most.
How fast can you get a payday loan?
Short-term loans, by their very nature, should be with you quickly once you have been approved by a lender. If you are applying for a short-term loan (also known as a payday loan), you are probably in need of fast cash. The idea of payday loans was always that a borrower would take out a small loan to cover unexpected costs that arise before their next payday. These are costs that need to be met right away. Otherwise, the borrower would simply wait until they have been paid, instead of borrowing.
So payday lenders developed ways to approve applications and get cash out to borrowers on the same day that they apply. Over the years, short-term lenders have made this process even quicker and now, here at Moneyboat, we can often get cash into a borrower’s account just 15 minutes after they are approved and all our checks have been completed. This is providing we have all we need to make a confident lending decision from the initial application and we don’t need any additional documents. Read more about our 15 minute funding.
Why might you need cash fast?
So in what kind of situation might somebody need to access cash quickly? The most obvious scenario is when something essential breaks down. Whether it be a car or a washing machine, if you don’t have the money to pay for repairs, you are really going to struggle until your next payday.
Equally panic-inducing is something like a leaky roof or a smashed window. These are the kinds of household repairs that need to be seen to immediately in order to keep yourself and your family safe. If you find yourself lacking the cash to pay a tradesperson to repair something vital, a payday loan could be a solution, depending on your financial situation.
Another situation that results in people. needing access to quick cash is when an unexpected bill arrives. If your kids’ school suddenly needs you to cover the costs for a school trip you had forgotten about, or you need emergency dental work, these costs also need to be dealt with right there and then. Being able to access cash on the same day that you apply, or even within hours or minutes can really get you out of a sticky situation.
Are payday loans the best fast cash solution?
Payday loans can be a really useful option, providing you actually have a regular income and can demonstrate that you can afford to repay the loan on your next payday or over a small number of instalments.
Payday lenders, like Moneyboat, are required, by law, to carry out thorough affordability checks, which will mean looking at your income, your employment status, your outgoings and your credit file. We then use this information to establish whether you can afford to make the repayments you are signing up for.
Payday loans can be a convenient way to access fast cash, but they are also expensive. Interest rates for payday loans are capped at 0.8% per day, which can soon add up if you’re repaying over a number of weeks or months. The longer you take to repay the loan, the more you will pay in interest. Also, there are extra costs to bear in mind, such as penalties for late or missed payments.
What are the other ways to get hold of quick cash?
If you have found yourself in need of emergency cash to tide you over until payday, there are other options aside from payday loans to consider. Here are our suggestions for some of the other best ways to get cash fast:
Sell your stuff
eBay continues to be a great way to get fast cash as it costs nothing to list items, you just pay when you sell something. You can opt for a Buy it Now, rather than an auction format, which will allow you to set a price and get your item sold quickly. When you sell items on eBay you will usually be paid within a few days of the sale going through. So it’s not immediate, but still quite quick and a lot cheaper than taking out a loan.
Borrow from a friend or family member
Asking friends and family for financial help is never ideal, but you may find that they are open to helping you out, especially in an emergency situation. It’s a good idea to tell them exactly when you will repay the loan, rather than simply saying ‘thanks, I’ll pay you back’. And it goes without saying that repayment should be a priority for you as soon as you have some cash in your bank account.
Ask for an advance on your salary
If you are employed and have been in the same job for at least a few months, your boss may be open to giving you an advance on your salary. This is providing you haven’t asked before and they consider you a loyal employee. Take the request seriously and put it in writing, as this will give you a better chance of success. Unless your boss owns the business, they may have to pass your request onto HR or the company Director, for example, so an official, a written request is helpful. One caveat if you are successful is that you will need to make sure your wages last longer than usual. If you spend your advance too quickly, you could easily find yourself out of pocket again next month!
Use a bank account overdraft
If you haven’t had credit problems in the past, your bank will probably consider offering you an overdraft if you request one. An overdraft is a line of credit that you can withdraw money from, attached to your regular bank account. You will be charged interest on the amount you borrow on a daily basis, so repay the balance as quickly as you can.
Although overdrafts still cost you money, once you have arranged one, they give you the option to withdraw cash when they run short with no prior application or notice.
To sum up, payday loans can be a good option when you are in need of emergency cash - especially if you need that cash today. We base our lending decisions on more than just your credit file, so you may be accepted for a Moneyboat loan even if you have had credit issues in the past. However, payday loans aren’t for everyone and are costly when compared with some other ways to access quick cash. Our advice, when it comes to getting cash fast, think carefully, do your research, and keep an open mind.
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Representative Example: Borrow £400 for 4 months, 4 monthly repayments of £149.37. Total repayment £597.48, interest rate p.a. (fixed) 255.5%. Representative APR 939.5%.Compare Moneyboat loans.
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