Most employees receive their salary on a fixed day every week or month depending on their terms of employment with the company they are working with. Payday loans are short term loans offered by finance companies to employees to bridge a deficit in funds until they receive their next salary. Unlike conventional loans, the paper work needed for getting a payday loan is minimal; often only proof of employment is needed.
Borrowers can apply for payday loans both online or offline depending on their convenience, interest rates charges and terms and conditions. Payday loans are often taken to tide a financial emergency.
One of the most common types of financial emergencies is an accident - usually a vehicle accident. In addition to the damage to a vehicle, the accident victim may suffer from injuries which may need hospitalization for some time. Most hospitals insist on a deposit before admitting the victim, as the victim or his family may not have sufficient funds at a later date. Diagnostic tests, medical procedures such as surgery, medicines, and consultancy fees of medical specialists can also increase the bills to be paid. While the employee may have some savings, these may not be sufficient to tide over medical emergencies. Often the savings are blocked or inaccessible for a period of several years, so a payday loan will be needed.
A serious illness of a family member like cancer can disrupt the finances of an employee. Like an accident, hospitalization expenses, medicines can be expensive. The death of a close family member or friend may make it necessary to travel long distances at very short notice. Air travel is very expensive, especially in the peak travel season, when airline hike their airfares to maximize their profit. The payday loan will cover these travel expenses.
Unexpected legal expenses can affect the monthly budget of an employee who is getting a fixed salary. If a person is falsely implicated or accused by a person who is jealous, greedy or malicious, it may be necessary to hire a lawyer to fight the case. Often lawyers will not be willing to take up all cases, especially if the opponent is well connected. So finding a suitable lawyer can be very expensive, as many lawyers charge an upfront retainer fee. In such cases, the employee may have to take a payday loan to bridge the gap in finances to pay the legal fees.