Every year, there are millions of automobile accidents, causing physical injuries, property damage, and even death. When property damage and injuries arise, some drivers may seek out payday loans to cover the costs of the accident and/or the resulting unpaid bills.
While a payday advance can function as a safety net by covering smaller costs associated with auto-accidents, such as an insurance deductible, doctor's visit, or utility bill that has gone unpaid as an effect of the collision, these types of loans are not large enough to cover the full cost of such accidents.
Payday loan lenders rarely grant loans in excess of $1,000 due to the high interest and short payback period associated with such advances. Thus, this type of service is less than ideal in a serious, costly accident. While this may make these types of loans less desirable to some seeking a loan, it is actually a great service to the borrower, as it protects him/her from taking out more money than he/she can realistically pay back.
In anticipation of unforeseen accidents, loan lenders encourage individuals to establish a budget that allows for a savings account. However, approximately one-third of Americans do not have savings accounts, demonstrating that other protective measures need to be in place for motorists.
Don't count on a payday loan to cover all your accident expenses; take the safe road and choose the insurance type that works best for your budget and peace of mind.