9941809195_6f1cbf17c8_zEvery year millions of payday loans are issued. No doubt you know someone who takes out a cash advance from time to time. The nature of these loans is to be almost immediately repaid (the loan payment is due on your next payday) and while some people only use them during an emergency, a great many payday borrowers return to their lender time and time again.

And you may be wondering ‘why?’ What do people spend these loans on, and are they borrowing so often?

Of course, this is going to rely on the numbers game, and lumping people into generalized groups. In reality, for every 100 payday loans there are 100 different stories to go with them – every person is unique, every set of needs is unique, and the beauty of payday loans is that you can borrow the money you need no questions asked.

But based on surveys and customer feedback, we know the major reasons people turn to payday lenders to make ends meet.

1. Emergencies

Traditionally, most payday loans were used for emergencies. Sudden car repairs, money for medical expenses, unexpected travel, and other “from out of nowhere” costs that no on ever sees coming. And it continues to be true today… sort of.

Roughly one third of payday borrowers say they need the money for emergencies.

But the truth is that the word “emergency” means something different to everyone. For you, it might mean a trip to the Emergency Room or the repair station. For someone else it might mean paying a cell phone bill, or buying groceries.

2. Everyday Expenses

Gas for your vehicle, groceries for your pantry, a new pair of socks, change for the bus: these sort of things are the expenses you plan and budget for. Buying food shouldn’t constitute an “emergency” yet many people find it hard to cover all their regular expenses on their regular pay. So they need to start borrowing.

3210208213_5bfb9962ae_z3. Bills

Much like the previous entry, bills are something that should never be a surprise. You know they are coming every month! That said, there are fluctuations in rates, and sometimes your phone or electric bill is much higher than usual, or the premium is due on your insurance. Using payday loans to pay the monthly bills has been a trend on the rise for the last few years.

4. Holidays, Gifts, Special Occasions

There are some events where you just need to have some spending money, and it can’t wait until payday. Be it a birthday gift, an anniversary night on the town, or a graduation lunch, there are certain occasions and moments that are more important than money.

5. To Avoid Borrowing from Friends and Family

If you need a little extra money, and the banks and credit companies won’t help you, there are few options left. Many people will turn to friends or family for a short term loan. But a lot of people who use payday loans simply do not want to borrow from loved ones.

The reasons for this are varied. Perhaps they do not want to jeopardize their friendship by sharing their financial burden. Maybe it is just a matter of pride, and not wanting to tell their family they need to borrow money. In some cases, those friends and family have nothing to spare.

Regardless of the reason, some borrowers are just more comfortable using a business for their financial needs.

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