The ability to borrow money in an emergency is priceless. When your car or your A/C breaks down, a loan gives you a quick injection of cash, so you can take care of business. Still, it’s not always easy finding a loan you feel comfortable borrowing.
If your credit score is less than perfect, you might toy with getting a direct payday loan. A payday loans direct lender doesn’t prioritize good credit like many other lenders, so they’re more likely to approve your request for funds.
But direct payday loans have a lousy reputation—not to mention they aren’t the only options available for bad credit. So, before you turn to borrow, ask yourself these three questions. They’ll help you determine if this is the right solution to your financial emergency.
1. Do You Need Money Unexpectedly?
Any legitimate financial institution will tell you that you should only ever borrow money for unexpected expenses. Even direct lenders for payday loans stress this point.
That’s because predictable expenses give you a warning. Whether it’s monthly rent, quarterly tax payments, or your child’s birthday, you know the date they’re due, so you should set aside cash each month to cover them.
Unfortunately, you won’t always get a fair warning for every expense coming your way. Take an unexpected road collision that has you paying repairs out of pocket, as an example. You might work with online loans from direct lenders to handle an unpredictable event like that.
2. Is This Expense Essential?
When it comes to borrowing money of any kind, it’s important you know the difference between your needs and wants. But this distinction isn’t always cut and dry.
Take your cell phone as an example. Having a phone is important if you need it for work and don’t own a landline. But having the latest iPhone isn’t necessary to make or take calls.
If your phone breaks unexpectedly, you might borrow money to find an affordable smartphone but leave the most expensive model for when you have room in your budget. Payday loans direct lenders only recommend borrowing funds for the bare essentials.
3. Can it Wait?
Urgency is perhaps the single most important factor when borrowing money. Your expense may be unexpected and essential, but it may not be worth taking out a loan if you can put it on the backburner.
You can postpone some unexpected, essential expenses until you save up the money. Other expenses have a tight deadline, leaving you no other choice but to pay for it right away or face bigger consequences.
Let’s look back at that example of your minor car accident. If you need that car to get to work every day so that you can pay your bills, time is of the essence to get it back on the road. But, if you can walk safely to work, you might be able to put off repairing it until you save up the cash.
Is it Time to Borrow?
This final question falls on your shoulders to answer. While this article can guide you through your decision, only you know if borrowing is the right choice.
And if direct payday loans still leave you second-guessing your options despite fulfilling the criteria above, consider alternatives like installment loans for bad credit.
But more importantly, start saving up for unexpected emergencies, so you can handle the next one on your own dime.