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How to Use Payday Loans

No two payday loans are the same. That’s because each person taking out the loan is different; their needs, concerns, and experiences are all unique. That said, there are many responsible reasons to use payday loans – and there are also not-so-great ways to utilize this type of loan. Let’s discuss how to properly use payday loans.

Smart Ways to Use Payday Loans

Payday loans, also called cash advances, are short-term loans that are usually paid back with the next paycheque. Given the repayment terms, here are some situations where using a payday loan can be beneficial.

Paying the hydro bill
Monthly utility bills are often a bit unpredictable. You may experience a hotter than normal summer or a much longer stretch of frigid temperatures in the winter. Even a couple of extra days running your cooling and heating systems can have a big impact on the final bill. Payday loans can be as small as $50, so instead of getting hit with an overdraft fee to pay a larger-than-expected utility bill, use a cash advance to cover the excess cost. For example, if your monthly bill is typically $125 and this month you get hit with a $215 bill, you can borrow the extra $90 using a payday loan.

Covering medical expenses
While standard health care covers our regular doctor appointments and hospital visits, there can be surprise costs associated with a sudden injury or illness. If you don’t have extended prescription coverage, medical expenses can take a bite out of your paycheque. Same with dental care; no coverage, and that filling is going to drain your wallet. Oral health issues can sneak up on you, and therefore, so does the bill. The average cost of a filling can be as high as $240, so using a payday loan to cover your costs can give both your wallet and your mouth some relief.

Fixing your car
It’s no secret that as cars age they require more maintenance. The average annual cost of repairs for a five-year-old car can be $800 or more depending on the problem. That average increases annually for the car’s lifespan. For some of us, public transportation isn’t an option, so ensuring your car can get fixed in a timely manner is extremely important. 310-LOAN offers payday loans up to $600 for first-time borrowers and up to $1,500 for returning customers depending on which province you live in. This could go a long way in covering car repair costs.

Avoiding bounced cheques
Having one or two NSF fees (No Sufficient Funds) on your banking record is no big deal. Having multiple - especially in a short period of time - can have an impact on your banking relationship later down the line. Not only that, but a bounced cheque fee can cost around $40 or more. Depending on how much you need to borrow, a cash advance can be a much cheaper alternative.

Bridging the gap between paycheques
Sometimes, you just can’t quite make it from your last paycheque to your next. Maybe your bills add up to where you are short one paycheque but know you’ll have a surplus on the next. A payday loan can help you through the tough weeks until the surplus flows in.

The Ways You Should Not Use A Payday Loan

Here are some examples of where payday loans may not be a good fit.


Paying off other loans
If you have a high-interest loan, it might be tempting to pay it off using another loan like a payday loan. This could be a poor choice. Given that you are expected to pay off your cash advance within a few weeks, you likely would not accrue enough interest on your high-interest loan to offset the fees of taking out a payday loan. It’s probably better to just focus on paying down your high-interest loan.

Getting a payday loan because your credit card is maxed out
Payday loans are short-term loans and if paid back in the required time-frame, are a great alternative to other types of loans. But if your credit card is maxed out, you may be having trouble with overspending. Taking out a payday loan could aggravate the situation and could land you in even more debt. If you’re struggling with debt, check out our tips for getting out of debt.

Making large, unnecessary purchases
We know, big retail discounts are an important opportunity to save some cash on that new big-ticket item you’ve been planning for. But taking out a payday loan to purchase items like this might not be the best solution - especially when you have months of time to save up. Cash advances are just that: an advance on your paycheque that needs to be quickly paid off.

At 310-LOAN, it’s important to us that our customers can maintain financial independence even during the hard times. We believe our service is here to help you get through to the other side of those unsuspected burdens. Payday loans are an important product for certain situations and can end up saving you money on fees associated with paying bills late or not having enough funds. When used responsibly, cash advances have helped millions of people across Canada - and we’re happy to help you, too!

Apply today to find out how we can help you with your financial needs!

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