Make Sure You Borrow Money Wisely

Payday loans are an easy, quick way to borrow money. Some people are tempted by this fast source of cash and borrow money when they don't really need it. Other people have heard horror stories about payday loans and don't want to look into getting one, even when it makes a lot of sense. Below are five situations where taking out a payday loan makes sense. Although not an all-inclusive list, they demonstrate sound reasons for taking out a payday loan.

A Close Relative is on Their Deathbed

We live in a mobile society, and the chances are pretty good that you have a parent, sibling, or child that lives a considerable distance away. If you get a call telling you that a close relative of yours is on their deathbed, you would probably regret it forever if you couldn't get to them to say goodbye. Unfortunately, you might not have money for plane tickets in your bank account. As long as you will be able to pay off your payday loan with your next paycheck, it is reasonable to take out a paycheck advance to say goodbye to a close relative.

Your Car Breaks Down

In many areas of the country, we need our cars to get around. When our car breaks down, we might not be able to get to the grocery store, doctor's appointments, or to work. Without a way to get to work, you could lose your job. If you don't have any money set aside for car repairs, it can make a lot of sense to take out a payday loan in order to get your car repaired.

Utilities or Rent are Threatening

Sometimes money is tight and unexpected bills can cause us to make tough choices. Should you pay the electric bill or the doctor bill? If you have had to put off paying your utilities or rent and they are now threatening to cut off service or evict you, you might want to consider a payday loan. Your utility company would probably charge fees to reconnect that are higher than what they payday lender would charge. Keep in mind that utilities and rent are recurring charges that you should plan for, so unless your bill is unexpectedly high, or there are other out-of-the ordinary things going on with your finances, if you are having trouble paying these bills, you might want to spend more time putting a budget together.

Avoid Overdraft Fees

While many people complain about the interest rates that payday lenders charge, bank overdraft fees can make the interest rate that payday lenders charge look like a pittance. Let's say your paycheck was a little short one week, and you have some automatic drafts coming out of your checking account. Unfortunately, one of the drafts is coming out of your account the day before payday, and it will overdraw your account by $5. This will trigger an overdraft fee of $30 at your bank. If you figure this as an annual percentage rate, paying $30 to borrow $5 for one day gives you an annual percentage rate of more than 200,000 percent! In many cases, it is less expensive to take out a payday loan. You might also want to check out the late fees that are charged by credit card companies and other people that bill you. It may be cheaper to take out a payday loan and make an on-time payment than to pay a late fee.

Get Medical Care

Going to the doctor can be expensive. Even with insurance, sometimes your share of the medical bill can be costly. A beloved pet's life may depend on whether you can get cash or not. Payday loans can help you pay your medical expenses when you are in a bind, but you may want to find out if you are eligible for other types of help as well. If you are poor, you may be eligible for Medicaid or a state health insurance program that can help you. If you are not poor but are living paycheck to paycheck, you might want to ask your doctor if they have any freebies that they can give to you.