Should I Use a Payday Loan for my Rent Deposit?

If you are moving into a new property then you will need to pay a deposit to your landlord. This is to secure the property and will tend to be a lot higher than your normal monthly rent as it will cover a number of things, such as covering the cost of any damage you cause to the property. This means that it can be difficult to find that quantity of money. If you are leaving a property, you may be able to get your deposit back from there, but it is likely that you will be able to get it in time as you may need to secure the new property before you old one is inspected and you get the deposit back. This means that you will need to fid the money before getting any back. There is also a chance that you may not get your deposit back if your landlord is not happy with the condition that you have left the property. If you are moving into rental property for the first time, you will not have a deposit to be returned anyway. It is therefore likely that you will need to fid the money needed for the deposit and there are many ways that you will be able to finance it. One way that you might consider is a payday loan.

How does a payday loan work?

A payday loan works in a different way compared with many other types of loan. This means that you will need to make sure that you understand how they work before you decide whether having one is the right thing for you to do. You will need to be aware that there is usually just one lump sum repayment which will take place on your next pay day. This means that you will need to make sure that you have enough money available to pay it. If you are relying on getting back you deposit from your previous rental property in order to use as a repayment then you will need to check the dates carefully and make sure that you are confident that it will come on time. You may need to have a back up plan, thinking abut where else you might be able to get the money from if you need it. You will have just been paid as the payment will go out on your pay day. However, you will need to be sure that there are not too many other direct debts going out as it may not leave enough money to cover the repayment or even if it does, there may not be enough to cover all the other expenses.

Will I qualify for a payday loan?

It is worth making sure that you will qualify for a loan of this type before you rely on using one. There is no credit check done, so that means that you do not need to worry if you have a poor credit score as it will not make any difference to whether you get approval or not. There are actually very few restrictions and so this will mean that there will be very few people that do not qualify for the payday loan. You do need to have a checking account as you will need to have the loan paid into it and there will be a direct debit set up from it which will repay the loan. You will also need to have a regular income so that the repayment can be set up to leave your account on the day that you receive your pay check. Other than that you will need to be an adult so that you can legally borrow money and you will need to be a US resident.

Can I use it for a deposit?

There are also no restrictions on how you spend the money that you get from the loan. This means that it is quite possible to use it for a deposit. Of course, it is really important to make sure that it is the right thing for you to do. You need to think about all of the options that you have and this will allow you to know whether a payday loan will be the best option for you. You need to consider other borrowing options as well as whether you can manage without borrowing. Consider all sorts of factors such as the cost, how well you will manage the repayments and how you will feel about being in debt. You may feel that it would be better to wait and save up, but it may mean that you will lose the property you wanted and have to choose another one. So, this will depend on how desperate you are to move and how you feel about that particular place and if you are prepared to give it up.

Who to Ask About Payday Loans

If you are considering a payday loan, then it could be wise to ask others about what they think of them. Understanding how they work, finding out about lenders and getting an idea of other people’s experiences are all important things that will help you in your research process. It will not only allow you to understand more about the loans and how they work but it will also allow you to pick between lenders and see which you think will be the most suitable for you. You may wonder though, who you should be asking about them.

Family

Family are really some of the best people to ask. They love you and have your best interests at heart which means that they will give you unbiased advice. They will be able to tell you what experiences they have had of payday loans and whether they will be able to recommend any lenders to you or give you any advice. Although they are a really good source of help, you may be reluctant to talk to them. You might feel that you do not want to tell your family about what is going on with your finances. You might feel embarrassed or that you do not want to reveal this information to them. You may worry that they will feel that they want to help you out when you know that you are looking to borrow money and you may not want them to feel like that. It may be that you want to be independent and do not want them to know that you are struggling financially.

Friends

You may prefer to talk to your friends as they are less likely to want to help you financially and you may feel less embarrassed as it is possible that they will be able to help you more and may have been more likely to have had a payday loan. They still will have no reason to be biased though as they will still have your best interests at heart. Therefore you may decide that you would rather ask them than anyone else.

Work colleagues

Asking around at work can be useful because you tend to have a more diverse group of people. This means that if your friends and family are unlikely to take out a payday loan, this may not apply to those that you work with. You could find that quite a few have had pay day loans and will be happy to talk to you about it. It may be that you feel less comfortable discussing this sort of thing with them though. Money is a very personal thing and you may decide that you want to keep it personal and not discuss it in the work place.

Online

There are many places online where you can find out about payday loans. It is a good idea to look at lots of sites though as there may be some that are biased and if you are unsure then ignore the site. Try to find general finance sites and see what they have to say. It can also be useful looking on personal finance websites which might have lots of information including general information about payday loan. You can remain anonymous online as well which means that you will not have any chance of those you know finding out about your financial situation. There is boas online though that you need to be aware of. You may find that the lenders will be putting information out there which will lead to more people liking them and less liking their opposition.

So, as you can see it would be better to ask people you know, if you can. Those that are closest to you, such as friends and family, will be more likely to give you unbiased advice. However, if you do not want to discuss finance with them, then you might have to turn elsewhere. You may find work colleagues are quite useful, but many people do not want to start a finance discussion at work. Online will have lots of information but it is important to make sure that you are not looking at biased information. Look on lots of different websites and compare the information that you have to see whether it seems genuine. If there is some negativity then this could actually be a good thing as it shows that the company is not trying to artificially portray itself as perfect, when no company is perfect. Also, you may find that things some people point out as negatives may just not that important to you. You might just want something that can be organised quickly, whereas others may be looking for very polite customer service staff. Although both may be possible, it might be that they do not want the same things as you and so their idea of a poor lender may actually be your idea of a good one.