This isn't to say that payday loans necessarily represent the best option for all borrowers. However, with more people seeking credit and lenders being less obliging with their funds, many are forced to take what is often seen as an easier option.
Let's say you go to your bank for a loan. The likelihood is that you won't get a decision on the same day, in fact you might not even get it on the next day. If you're really up against it and you need the cash to cover an imminent bill or to buy the last Christmas present, this might not be time that you have at your disposal. Whilst you shouldn't discount long-term loans simply due to their comparative speed or efficiency, it's something that certainly improves the appeal of short-term alternatives.
If you are aware that you don't have a perfect credit rating or have already been rejected for a loan elsewhere, then your choices are going to be immediately limited. Both of the aforementioned issues will often lead to immediate rejection from conventional borrowers. However, this will cause no such problems when applying for a payday loan.
Short-term borrowing is defined by accessibility and swiftness. It's difficult for any other form of credit or loan to compete on either front. There is a price to pay for this though. With interest rates of up to 30%, it's not the cheapest option in the current market. However, for some it might represent the only realistic alternative to missing payments or enduring a disappointing Christmas.
As previously mentioned, Christmas is the largest contributing factor behind the major increase in payday loan applications during December. Even for those who are working to a strict budget, it can prove to be an extremely testing period for your finances. Not only do you need to take your normal monthly spending into account, but you also need to consider the cost of presents, decorating your home and feeding the family. None of this is cheap.
Rather than letting anybody down, many prefer to off-set the cost of Christmas by borrowing a little extra and paying it off in the New Year. This way you can continue to enjoy the festivities without having to worry about slipping into the red. However, if you are reckless with your borrowing and end up with more debt than you can manage, this could create significant problems for you in the future.
You have to be realistic and weigh up the comparative benefits and risks of borrowing. If you can't afford it, don't borrow it. Whilst you can enjoy yourself in the short-term, eventually the debt needs to be repaid; if you don't have the money on the agreed date, then your problems could get even worse.
So if you are in a tight spot financially this December, you won't be alone. Tens of thousands of people will be queuing up to get their hands on a little extra credit to see them through the Christmas period; many of whom will end up choosing a payday loan. It's an expensive time of year, but you don't need to go without money, as long as you are responsible when borrowing.
