Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Feb 12, 2013

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When peoples’ wallets are light and money is tight, a number of them turn to payday loans.

It’s hard to imagine that before payday loans, the only option for cash-strapped individuals was to approach friends and family or take something valuable to a pawnshop. Borrowing a small amount of money from a bank would be helpful, but some banks can take weeks to process an application for a loan.

Since these options are tenuous at best, many people turn to payday loans.

“The cash advance—with its one-time, flat fee (typically $15 per $100 borrowed)—is often the most affordable option,” said Jamie Fulmer, Senior Vice President of Public Affairs for Advance America, in an interview with

Here’s a list of five reasons why you should borrow a payday loan when money is tight.

Number 1: Convenience

Payday loans take the cake when it comes to convenience. Most major cities in states where short-term loans are legal have at least one or two payday lender stores. While certain states, counties, and cities have outright banned this industry, those locations currently remain in the minority. Chances are there is a lender within driving distance of you.

More to the point, there is the wonderfully infinite world of online business. Payday loan websites are a dime a dozen. You’ve probably seen commercials or online ads trying to get you to visit a payday loan company’s website. Some even advertise a phone number and a means to borrow a payday loan by calling a representative.

Talk about the ultimate in convenience. You don’t even need a computer or car to get a payday loan. Just the cell phone in your pocket.

Fulmer said it’s precisely due to this flexibility and ease of access that cause his customers to enjoy the use of short-term loans.

But convenience alone isn’t the only reason you should borrow a cash advance when money gets tight.

Number 2: Speed

If you want a loan from a bank, chances are you are going to have to call the bank, speak with a representative, wait on hold as you get transferred to a loan officer, speak with that loan officer, schedule an appointment, and finally drive to meet with your new loan officer at the scheduled time.

Not exactly a quick process, especially if you need money immediately!

So how do payday loans differ? Well, compared to banks and credit unions, they might as well be moving at the speed of light.

Payday loan companies can approve you for financing within minutes. This is because they don’t bother to run credit checks. Some don’t even bother to run employment records. They simply want to verify you have income or a sufficient balance in a bank account to justify them loaning you money.

It’s a simple process that leads to a faster result.

Number 3: Privacy

Nobody wants to bother other people for money if they don’t have to. Worse still, many people feel ashamed or weak if they suddenly find themselves in a desperate financial situation with little money available to them.

Instead of having to explain to family and friends why you have no money, you could simply borrow a payday loan.

Assuming you go to a payday lender store in order to borrow money, you will be treated as a customer and not someone begging for money. It will be a private matter that exists only between you and your lender.

Number 4: Bad Credit

Not everyone has good credit. In fact, thanks to that wonderful recession, few people have “good” credit anymore. This is because most everyone had to dip into their savings, default on extraneous financial obligations, or tap into their credit lines in order to weather the worst months of the recession.

When you have to use up a lot of your credit, it is reflected in your credit score, which gets lowered accordingly. With so many people running around with bad credit, chances are they can’t get a normal loan—or even a credit card—from a bank or credit union. What are these people to do?

Payday financing companies don’t bother to check credit scores. In fact, they assume their customers don’t have good credit; so why bother checking?

However, not all payday loan companies use this to prey on customers with poor lending practices.

“A complex framework of federal and state rules governs nearly every aspect of regulated lenders’ operations, from truth in advertising to disclosure to maximum loan amounts to collections practices,” said Fulmer.

This is music to the ears of bad credit consumers. They can go to payday financing companies, which may be the only lending source who will lend them money, and be greeted with open (yet safe) arms.

Number 5: The Last Resort

Let’s imagine a horrible situation; just for a second.

You have no money. Your family and friends refuse to lend you money. Your credit is so bad that it is in the double digits. You have an emergency that just can’t wait and can only be solved with money.

Chances are, you won’t have any luck getting a bank or credit union to give you money. So where do you turn now that you are wits’ end?

You do the only thing you can do: you get a payday loan.

With that money, you handle your emergency situation and take a step to regaining control of your life again.

Hopefully, you are never in a situation that “forces” you to borrow of a payday loan, but, if you do find yourself in such a predicament, it’s nice to know that there are trusted and legal lending sources out there. These five reasons can really help you understand when you should borrow a payday loan.

However, as a final piece of advice to leave you with: Remember, cash advances carry interest like any other type of loan and must be repaid on time, so don’t borrow them hastily or without some careful forethought.