If you have found yourself in a tough financial situation, maybe because you incurred an unexpected cost such as car repairs and you realize that you are not able to pay your mortgage on time this month, then you may be looking to borrow money instantly online. Not being able to pay your mortgage can have severe consequences and so, being able to make your monthly repayments is crucial to avoid having your property repossessed due to lack of payment.
Borrowing a small amount of money, such as borrowing $1,500 might be able to help you top up your regular income, when you fall short and need to pay your mortgage this month, to help make sure that your house is not repossessed by your lender because of late repayments. Payday loans can even be taken out by those who have bad credit.
Payday loans are unsecured loans so it would mean that there is no danger of any of your assets being repossessed if you do not repay on time however there will be financial consequences and your loan will end up costing a lot more than you anticipated if you do not repay on time.
If your mortgage consistently costs too much money then it may not be wise to use a payday loan to pay your mortgage as you might end up in a vicious cycle of debt. Instead look at alternatives to payday loans like payday advances or borrowing from family and friends.
Can You Use A Payday Loan To Pay A Mortgage?
In short, yes, it is possible to use your payday loan to pay your mortgage, however it probably is not wise. A mortgage is a monthly repayment and by using a short term loan like a payday loan to pay your mortgage you will be getting yourself into more debt.
It might be wiser to look at alternatives to payday loans such as payday advances or an authorised overdraft to help you pay your mortgage this month.
If you are struggling to pay your mortgage every month then you may want to look at different solutions such as remortgaging or taking out a secured loan to help you borrow a larger amount against your property and pay off a large amount of your mortgage to reduce monthly repayments.
You might just be having a tough financial month and want a small payday loan such as borrowing $400 to help you pay your bills this month. If you have had an unexpected cost such as medical bills then this might help you this month before being able to pay your mortgage like normal in the coming months.
Make sure that before you apply for a loan that you know you will have the money to repay the loan when the term is up, if not you will find yourself in more debt and there will be financial and personal consequences for not repaying your payday loan on time.
What Are The Advantages of Using a Payday Loan for a Mortgage?
There are both advantages and disadvantages to using a payday loan to pay your mortgage. There are also a range of alternative options you should always consider if you cannot make the necessary repayments on a mortgage. The first thing you should always do is speak to your bank or lender who may be able to help you with a repayment plan to get you back on your feet as soon as possible.
Outlined below are some of the pros and cons if you are thinking about taking out a short term unsecured loan to help pay your mortgage this month.
Advantages of using payday loans to help you make mortgage repayments:
- Quick Cash – Payday loans allow you to get cash fast. That means if the deadline to repay your mortgage is coming up then a payday loan can be in your account within 1 day as long as you are eligible and live in an eligible state
- Unsecured – Payday loans are unsecured which means that you do not have to worry about your loan being secured against one of your assets like your mortgage
- Approved With Bad Credit – Even those with bad credit can be accepted for a payday loan allowing you to borrow even with a poor credit rating
- Easy To Access – Payday loans do not require a lot of hassle or information in order to apply and you can borrow money online quickly for whatever reason you need the money for
What Are The Disadvantages of Using Payday Loans for a Mortgage?
Of course, using a payday loan should always be treated as a last resort and it should never be something you turn to immediately or in the first instance. Because payday loans are short term solutions for financial emergencies, longer term and persistent financial problems should be dealt with by looking for and addressing underlying causes of debt. Payday loans are designed to help you from payday to payday and not to help you transform every element of your financial situation.
Disadvantages of using payday loans to help you make mortgage repayments:
- High Interest Rates – However, payday loans come with high interest rates and APR rates meaning you will be paying back your loan in installments but it might become quite expensive if you decide to take out a payday loan to pay your mortgage
- May End Up Costing You More – Due to these high interest rates, the payday loan may end up costing you more than other alternatives or waiting until payday loan to pay your mortgage and paying the fines that will come with paying your mortgage late
- Can Affect Credit Rating – Unfortunately, taking out a payday loan may affect your credit score with credit checks done on most payday loans taken out. Look for no credit check loans to help you if you are worried about your credit rating being affected
What Can I Use Payday Loans For?
Although there are no purely correct ways in which to use payday loans, you should remember that they should only be used for essentials and in times of absolute financial emergencies. Therefore, if you have savings or if you have a viable alternative to a payday loan, even if you just need to borrow $500 or another seemingly small amount of money, utilize your alternative options. If you find yourself needing something larger, like a $1000 loan for example, there may be other loan options available to you which you should also consider.
Common uses for payday loans in the USA include (but are not always limited to):
- Emergency car and vehicle repairs
- Emergency home repairs
- Last minute and emergency travel
- Medical bills
- Veterinary Bills
- Rent and mortgage repayments (when no alternative exists)
Payday loans used correctly can get you out of tricky financial situations, as many online lenders will give you an instant decision and same day funding, to help you get the money you need fast and get back on your feet as soon as possible.
