With all the flashing, neon lights in store windows, grabbing your attention from across a sidewalk, it’s hard to believe that using a payday loan service could actually save you money. After-all, says the first impressions part of our brain, nothing that tacky can actually be promoting something good…can it?
We get the doubtful end of the stick all the time. And, we don’t blame you.
“The fees are enormous, so how is getting an advance on my pay going to save me money?”.
It truly depends on the situation, but we assure you there are unique circumstances where a payday loan can help keep more money in your pocket.
Like all types of short term loans (lines of credit, credit cards, etc), if used responsibly, you could find yourself ahead.
Here are just a few examples of how using a payday loan could help save you money.
You want to take a trip somewhere tropical in six months. You’re keeping your eye on the discount airliners for rock-bottom prices or cancellations. You estimate, the nature of ticket pricing being what it is, that you have some time to save up.
One month passes, and your airline of choice has a huge seat sale for $400 (taxes in) round trip. You were planning on spending $600. Problem is you’ve only managed to save $200 so far and your credit card is maxed out for the month. You know the tickets will be sucked up fast, and there’s no way to be sure that you’ll get lucky on a cancellation.
Where can you get the extra $200? A cash advance!
Recall that, in Ontario, the maximum allowable fee per $100 borrowed is $21. So, do the math.
If you need to borrow the remaining $200 to buy the ticket, that’s a total of $42 in fees for a total ticket cost of $442. If you were preparing to spend $600, you just saved yourself $158 bucks!
And, you did it all with a payday loan and it’s fees.
Check back next week for Part II!
Remember, if you need a short term loan before your next pay day, head on over to GoDay.ca to apply!