Faxless Payday Loans - Yay Or Nay?

The first thing you need to understand about faxless payday loans is that they are no different from any other kind of loan. Sure, the rates differ from bank loans, as do terms and conditions, but any kind of loan is going to cost you, even if it is borrowing money from friends or relatives. If it doesn't cost you money, it will at least cost you a return favour.

The difference between the different kinds of loans lies in how much it costs and what the terms and conditions are. A bank loan can be a good idea for buying a car or a house, borrowing 100 pounds from a friend so you can throw a good party for your birthday can be considered, and faxless payday loans can be a great way to stave off small disasters or big hassles. In fact, a faxless payday loan can even save you money.

How?
Your Washing Machine Dies - Now What?
Let's say you have three young children coming home daily in dirty clothes. It's the 12th of the month, and your laundry machine gives up the ghost. A mechanic comes by and tells you it's beyond salvation. What to do?

You start digging through ads looking for a good deal. You find one that is on sale until the end of the week. It's on offer for 500 pounds, down from the normal 750 pounds. Great deal! Except, you don't have that money just yet. You need to wait for your next paycheck to come in at the end of the month, but by that time the offer will expire and you won't be able to save yourself 250 pounds.

If you would take out a payday loan for the 500 pounds you would pay a total of 150 pounds to your lender if they charge 30%. So you would pay a total of 650 to get that machine: 500 to the shop and 150 to your lender. That means you will still save 100 pounds!

The tricky bit is to be sensible with your finances. If paying back the loan at the end of the month means you won't have enough money for food and bills, you're just creating a problem by solving another one. And that is where a faxless payday loan can become very expensive: if you're not able to make the payment within a month, you'll have to pay the same flat rate for the next month.

Faxless payday loans are meant to be used for short-term problem solving, not for long-term financial deficits. In such a case, borrowing money from a relative would be a better option.

Another thing to be aware of is using payday loans for expenses that are not strictly necessary. It might sound like fun to borrow money so you can join your friends on that weekend trip, but keep in mind that you'll have to pay it back. As in the example above, not being able to repay on time, increases the cost immensely. If you'd take 3 months to pay it back, your weekend out with your friends could end up costing two times more than what it cost them. Not so much fun, I would say.

So if you want to use a faxless payday loan, think carefully. Consider all your options and weigh the pros and cons before you commit. Only get involved in faxless payday loans if you really need to, and only if repayment fits in with your finances.