With finance influencers taking over social media, it’s no surprise that Gen Z youth are investing earlier than their predecessors.
But despite being armed with saving and investing tips, it’s still possible for young adults to lose their financial footing now and then. Financial emergencies can take the form of unexpected bills, car repairs, or even overspending.
In the long term, it’s good for Gen Z adults to develop ways to prevent these issues through strategies like budgeting, expense tracking, and bill reminders. But in the short term, payday loans may offer a solution.
What are payday loans?
A payday loan is a short-term loan that gives borrowers access to a maximum of $1,500 for unanticipated expenses. Borrowers typically repay the amount borrowed plus a fee on their next payday. Payday loans can be used for a wide range of expenses, such as utility bills, pet medical bills, groceries, rent, and more.
The application process is simple and straightforward, even for young Gen Z adults who may not have experience with loans. Applicants will be asked to fill out a form (this can be done online or in-store) and attach proof of verifiable income, identity, and address before submission.
Payday loans are usually approved on the same day, with some applications taking no more than a few minutes. Online applicants will have the funds deposited in their account, while in-store applicants have the option of receiving a deposit or cash. The convenience and speed of the loan process make payday loans a good choice for anyone seeking funds urgently.
Are payday loans suitable for Gen Z?
Payday loans have excellent utility for all age groups. But there are certain ways in which payday loans benefit Gen Z adults.
- No credit check: Some Gen Z adults may not have the strong credit history that other types of financing require. In fact, some may have no credit history at all. Fortunately, payday lenders do not perform a credit check before lending to an applicant, so anyone over 18 with a verifiable income can apply.
- Unsecured loan: It’s not uncommon for people in urgent need of funds to pawn precious possessions such as jewelry or a car in exchange for much-needed cash. The risk to such personal items can cause a lot of unwanted stress and anxiety. A payday loan is unsecured, so you don’t have to worry about potentially losing a prized possession.
- Easy repayment: While applying for the loan, applicants provide lenders with a post-dated cheque or pre-authorized debit form that allows the lender to withdraw the amount owed from your account on payday. It is important to ensure you state your payday correctly and report a change in your payday to your lender as soon as possible (with appropriate documentation such as a bank statement or paystub).
The bottom line
A payday loan is a useful tool to help Gen Z young adults – especially those new to handling their own finances – deal with emergency expenses. It is a good idea to choose a reputable and licensed lender, read the loan agreement closely, and determine if the loan is right for you.
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Name: Carolina d’Arbelles-Valle
Job Title: Senior Digital PR Specialist