Payday loans come with a number of advantages and disadvantages. To start off, we have to know – what exactly is a payday loan?
A payday loan is an unsecured loan with its own set of terms and conditions. This makes it imperative for a payday loan borrower to know and analyze all the pros and cons before they proceed to apply. Amongst all personal loans, it is one of the trickier ones to navigate. Some people are turned off by higher interest rates, but it can be a great choice as it is available relatively easily.
In summary, depends on the borrower how effectively they manage the loan and repay it. So, if you’re confused about whether or not PayDay loans are suited for you, check out the following advantages!
Payday Loans Process Quickly
The entire application, verification and approval process is quick and money gets transferred to your account quickly. The whole process usually takes less than 24 hours. So, if you’re on a time crunch, this might be a good option to consider. If you decide that you need money today, walk into a payday loan store or apply online, you can have money to spend within an hour in some cases. This is not the case with many other types of credit. For example, if you wanted to get a credit card, you would have to apply, let the credit card company determine if you are creditworthy and then get approved, before getting a card in the mail. Therefore, a payday loan is a better option for people in immediate financial need.
Easy To Qualify And Get Approved
In order to be eligible for payday loans, you do not have to maintain an excellent credit score or debt service ratio. This makes it readily available and easily attainable. Of course there are some checks but they’re mainly interested in whether or not you have the means to pay back the loan. This is why the application will ask if you have a job or how much you make per month. If these qualifications are met, your loan will usually be granted and you can get your money! This is an advantage over other types of credit where you have to have a good credit score in order for approval. In addition, the processing time is usually very long, making it inconvenient during financial emergencies.
Payday Loan Services Are Readily Available
They have convenient service hours that are typically more flexible than most banks. So, this will make it easier to reach them whenever you want. This makes it easier to get payday or cash advance loans and to make your repayments on time.
No Need To Provide Collateral Security
Payday loans are available without having to provide collateral security. The rate is higher but you don’t risk losing your house or other valuable assets at any point in time.
Payday loans are granted based mainly on your monthly income. This means that you cannot apply for a loan that is incompatible with your earnings. Therefore, even if you want to borrow more, you cannot and this acts as a check on irrational borrowing. This might seem like a disadvantage to some, but it does carry a great benefit. This way, it will be easier for you to pay the loan back as you will be able to manage the amount from your income, whereas if you will take a loan that is higher than your income, then it’ll be quite difficult for you to pay it back along with accumulating interest rates.