I am not advocating the use of payday loans on a regular basis but in some circumstances they can offer a real alternative over long-term credit card, store card or traditional loan debt.

Short-term cash-flow problems often result in people turning to credit cards and long-term loans to pay for items that they need in a hurry. If all they really need is a cash injection to see them through until their next pay check arrives, a payday loan may be the best solution. Although with a typical APR of circa 25%, cash advance loans are quite expensive, due to the short duration of these types of loan they can sometimes prove to be cheaper than other forms of long-term credit.

Additionally, when paying for products and services by cash, customers may be able to negotiate a far better deal than those using credit.

Of course it is always advisable to have savings tucked away for the inevitable but unexpected expenditures that crop up in life however there are occasions when even the most prudent of savers can be caught out. For example, I have a savings account to cover household emergencies that are not covered by my house insurance. But when my boiler broke down and needed replacing in the same week as my washing machine I simply didn’t have the funds to pay for both. I couldn’t be without either hot water or my washing machine for two weeks until my salary was paid so I took out a payday loan to meet the shortfall in my savings. I was then able to get a very good deal on my washing machine and the savings I made more than covered the cost of the short-term loan. And as soon as my salary cleared my account I repaid the payday loan.

In this way I was able to resolve a short-term cash-flow crisis with an appropriate short-term payday loan.

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