One of the alternative ways of financing that has been successful for many individuals, families and businesses has been payday loan companies. Payday loan companies specialize in short-term financing and bridge loans for individuals who may have trouble in a traditional banking structure. There are also many cases in which a payday loans company would be advantageous to any borrower regardless of his or her standing with a traditional bank.
There are many instances in which a person, a family or business can actually save a great deal of money by taking advantage of short-term financing with a payday loan company. Below are a few of those situations.
One – If you can use short-term financing to avoid a late fee or penalty, it is usually worth it to finance instead of paying that penalty.
There are many instances in which the interest that you will pay on a short-term financing loan will be much less expensive than a penalty or a late fee on a late bill. For instance, utility bills are usually quite expensive to pay for it they are paid late. It can cost even more if the utilities turned off for lack of payment. This is an instance in which simply paying the bill off with a short term loan will save you a great deal of money.
Another instance in which you may want to pay off a bill with a short term loan is with the Internal Revenue Service. Fees and penalties are specially harsh when they are levied by the federal government. When you are dealing with government forces, you also face the prospect of even more harsh punishments. It is much better to finance these types of debts than it is to let them linger for any extended period of time.
Two – If you can use short-term financing to fore go interest payments on a high interest service, you definitely gain an advantage by using it.
If you have need of a high-interest service such as a medical procedure, you would do best to let the service be performed first and pay it off in installments to the short-term lender. Things such as medical emergencies should not wait on your next paycheck or windfall. It is much easier to have the operation, get yourself healthy and then worry about paying back the loan in installments to the payday loan company.
Three – If you can use short-term financing for a long term investment, you can actually come out ahead.
There are instances in which you can actually use short-term financing as an investment for your future. Basically, if you are trying to improve upon a long-term asset and you cannot get a loan from a traditional bank, short-term financing is a great way to move ahead with your plans without delay.
Short-term financing is a great way to pay for continuing education to improve your employ-ability. It is also a great way to fund an expansion of real estate. Both of the above examples are long-term assets that can be improved by short-term financing, giving the borrower a great return on investment.
Jacob Pettit is a financial adviser specializing in short term finance. He is also a father who loves to spend time with his family. When he is not involved in doing business he likes to take his wife and children camping. He writes articles on various interesting topics related to finance.