Unsecured Loan
There is a reason why the cost of payday loan is higher than the price of usual loans. A 10-dollar loan is an unsecured loan. Therefore, the risk for a lender is quite high. On top of this the lender does not check your credit. Again, this increases the risk for the lender. Obviously, you cannot expect a lender to give you money without him/her making an effort to minimize his/her risks. The high cost of this loan covers up the risk for lenders.
Low Cost Loans
However, you do not have to be dismayed by the talks about high cost of payday loan. Today you can opt to become a cash advance borrower. These lenders offer first timers a low interest rate loan. You want to know how low? These loans would cost you $10 for every $100 borrowed. This rate is for a week. So if you borrow $100 for two weeks, you would pay $20 as charge.
Great In Emergencies
Even with the high cost, these loans are worth it. These payday loans are best suited for financial emergencies. These borrowing options are called for when you are facing a severe cash crunch and you have to deal with your immediate emergency. Your immediate emergency can be in the form of a doctor's bill, car repair, utility bill payment, etc.
A fast cash loan will help you deal with your emergency by putting the much needed cash in your hands. On your next payday you can pay back the loan. If you look carefully, you will realize that a payday loan actually saves you money. The late fees on your credit card bills would turn out to be much higher than the fee you pay for cash advance loan. If you were unable to have your car repaired, you would have to miss work. Missing work for a day or two would definitely cost you more.
So in the end you can conclude, just like I did, that it makes sense to go for a fast cash loan when you face an emergency. Obviously, you have to keep in mind that you must repay the loan on time. Moreover, you have to maintain financial discipline. This way the cost of payday loan would be insignificant in comparison to all the trouble that it would save you.
