Sometimes you need a swift financial injection to support your needs, like paying the bills or for medical treatments. In those moments of need, it’s extremely important how you cope with the decision to borrow money from friends or financial institutions.
Sometimes a payday loan is the better option, while it’s better to turn to family and friends in other cases. So, what does it take to make the most convenient decision on the subject? It has a lot to do with the interest rates and the deadlines for returning the funds you’ve borrowed.
In this guide, Nick Wilson, CEO of Advance SOS and experienced loan officer, deals with all the benefits of using payday loans on one side or borrowing from family and friends on the other. The easy and fast application of AdvanceSOS helps you reach licensed lenders and get payday loans, installment loans. Join us to discover which way of borrowing money best suits your specific needs!
Reasons for borrowing the funds
You should always listen to the reason behind requesting a loan in the first place. While sometimes the installment loans and other types of solutions are best, other occasions require different methods.
So, if you need a short-term loan, payday loans make a great solution. They come with high interest rates and short terms of returning the funds but will do the job for you. In other situations, it would be better if you could rely on family and friends for the necessary help.
It all depends on your reasoning as, usually, a loan from family or friends doesn’t require any interest rates. This way, it’s more convenient for you to get the loan so you can return in its original form, without paying additional taxes.
However, if you need the money instantly, it could be more efficient to go with the payday loan as a solution. Either way, both solutions are convenient for meeting the supposed purpose – providing you with financial support.
Benefits of borrowing from family and friends
It’s best to consider the complete picture here as you don’t want to make any mistakes requesting the loans. It’s unfortunate enough that you find yourself in need of additional cash, so it’s crucial to avoid the consequences.
By using payday loans, applicants may be taken to court for not being able to respect the deal. You surely want to avoid not being able to pay back a payday loan for starters. This is the main advantage of borrowing from family and friends as this way you don’t have to worry about the consequences as much.
Also, perhaps you can renegotiate the terms with your family if you find yourself in an unfortunate situation. This option is only partially available with payday loan lenders, depending on where you take the loan.
Another benefit of borrowing from family or friends is that you will rarely pay any interest on the sum. On the other hand, taking a payday loan will usually result in an inability to escape the high-interest rates.
Know your situation before making the decision
By knowing for how long you need the loan, you can make the best possible decision with the loan. Short-term loans are perfectly suited for payday loans, but they lack efficiency in the long run.
On top of that, just imagine how much you would have to spend on interest rates by taking payday loans for a long time. That’s why it’s best to turn to family or friends for long-term loans rather than relying on payday loans.
It makes all the difference if you only need a single loan to tend to your needs. In this case, even payday loans can be quite convenient regardless of the interest rates.
Another aspect that affects the decision is the borrowed sum. So, if you need more than a payday loan can give you, it’s better to turn to family or friends.
Convenience comes first with the loans
Convenience may be crucial when thinking of getting a loan as these days you can even strike an online payday loan. Everything can be arranged with a few clicks after you pass your credit check. However, some other aspects can prevent you from getting a payday loan and make you turn to other methods.
Borrowing from family and friends can rarely result in legal consequences. On the other hand, jail time can also be given for failure to repay the money owed. If you are unable to meet your loan repayments, you can face legal action taken against you.
It’s not something that should be taken lightly, so managing a payday loan before taking it is crucial. Borrowing from family and friends is in most cases a much better option for numerous reasons. The one thing that goes to the favor of claiming the payday loan is the distance between you and your relatives.
If you can’t access the money on time, then the online payday loan may be the better solution. It all depends on the sum you need and the time when you would like to have the funds at your disposal.
Borrowing from Family and Friends vs. Payday Loans – Verdict
In cases that force you to apply for a loan, numerous factors can prevail when making the decision. That’s why you should always think it through and decide based on the information at your disposal.
Payday loans can get you through the month for values in the range from $100 to $35,000. Still, the payday loan comes with an additional cost that you will have to pay in the form of service taxes. The other way is much more convenient, as borrowing from family and friends is somewhat easier.
You won’t have to worry as much about being able to return the funds as you can always negotiate better terms this way.
Author: Amanda Girard
Amanda Girard is a well-seasoned financial copywriter on the AdvanceSOS team. Thanks to her, we can share financial know-how to help customers understand our financial products and services. We are proud to have her on board.