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The Reasons Why People Use Payday Loans

| March 01, 2022, 08:00 AM

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There are many different reasons why some people turn to the use of payday loans. Whilst some may use it to make a one-off extravagant purchase, such as a luxury holiday, they are also used by those people who find themselves in difficult financial situations. This article will look into some of the reasons in much more detail.

Consolidating debt

Lots of people take out a payday loan in order to cancel out any other debts that they may have. It is therefore used to pay off a loan from another lender or to pay off a credit card. Where it is being used for this purpose, then taking out a payday loan is a good idea, although better options do exist out there.

Paying bills

The most common of all reasons why people take out a payday loan is to pay their bills. This can include household utility bills, such as gas and electricity, car loan payments, or mobile telephone contract bills. One thing that people can do to ensure their bills do not get away from them is by trying to limit how much energy, data, etc. they use on a day-to-day basis.

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Medical expenses

For those people who do not have adequate medical insurance or none at all, experiencing a medical emergency can be very expensive indeed. Depending on the extent of the medical condition, medical bills can range anywhere from a couple of thousand dollars up to a few hundred thousand dollars. When a medical bill is not paid straight away, interest builds upon it, becoming more and more expensive.

Avoiding asking for help

Whilst some people feel happy and comfortable to turn to friends, family, and work colleagues to ask for financial help, many people do not and will take out a payday loan in order to avoid this embarrassment. Whilst borrowing money from friends or relatives will likely come without the need to pay interest, it does come with the potential for causing friction, which is why so many people avoid doing it.

Redundancy

Payday loans can be obtained by people who find themselves out of work through redundancy. When people lose their job, it can be a time of great uncertainty and lots of stress worrying about how bills will be paid for and food put on the table. A payday loan provides a certain amount of security until that person gets back on their feet and secures themself a new role.

Mortgage repayments

The option of taking out a payday loan is better than missing a mortgage repayment through not having sufficient funds. Missing a mortgage repayment has the potential to result in a person losing their home and so sometimes they feel that they have very little option but to take out a payday loan in order to avoid this from happening. Where a person continually struggles with making mortgage payments, they should talk with their lender to see if a more suitable payment plan can be agreed upon.

 

 

Category: Local News, NEWS

About the Author - Stephanie Maris

Stefanie is a local blogger and social media content marketer from Maryland and most recently a wife and a mother. She has an unhealthy obsession with puns, sarcasm and caffeinated beverages.

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