Emergencies are part and parcel of life, and payday loans are one way to counter financial hardships.
A payday loan is primarily a short-term loan that is guaranteed for a certain period, generally about two weeks.
Payday loans are addressed in different terms, such as emergency loans, short-term loans, paycheck advance, and bad credit loans, among many others.
Payday loans save you from penalties incurred by late payment since it is payable with the next paycheck. This means you are only in debt for a few weeks. Below are various other benefits of payday loans:
Convenience
Imagine getting your loan approved all from the comfort of your home or office? With payday loans, the processes and interactions involved are all carried out online.
You don’t have to book an appointment with your loan officer or visit and call the lender to approve the loan. You simply send your application form online.
Further, the forms are easy to fill, and the paperwork is minimal. You might not be required to fax the documents to the lender, though some lenders do require proof of income.
Most traditional loans dictate how you should spend the money that is lent. For example, you can only use a car loan to buy a car or a house mortgage to buy a home or property. All these conditions have been countered by the online loan industry. With a payday loan, you can spend the cash on anything from paying your rent to repairing your car.
Fast Cash
Payday loan forms are usually straightforward and only require necessary information. This means that the application process is seamless and simple. If you provide the required details fast, the loan gets approved quickly, and you might have the cash within an hour.
Other conventional loans have lengthy procedures that take a lot of time to process. They may take several days, and sometimes even weeks, to process. This means they might not be of much help when you have an emergency. You are also not assured that your loan will be approved. When you apply for a payday loan, you get the feedback within one hour. You can seek help elsewhere in case your application is rejected.
No Credit Check
Many people avoid applying for loans because they might get rejected due to poor credit scores. Payday loans, however, offer a viable alternative for such people as they don’t require a credit history. They also keep you safe from credit inquiry.
Moreover, this is a great way to protect your credit rating. When you repay loans in installments, anything can happen in between. This means you might be unable to refund the full amount, which then hurts your credit score. However, with a payday loan, you have a short repayment period. This is an advantage because it allows you to protect your credit rating.
Minimal Requirements
Conventional loans require you to put up collateral, such as your house or car. Besides, they need you to demonstrate that you have the ability to repay the loan.
Payday loans usually have fewer requirements. The basic requirements for a payday loan are proof of a steady income, a credit check, and a photo ID. You might also need validation to show permanent residency in the said state.
Primarily, this is what you need to qualify for a payday loan:
- Be 18 years or older
- Have a government ID or Social Security Number
- Have a regular source of income or job
- An active bank account
These requirements make payday loans more desirable. However, keep in mind that you are essentially writing the lender a check for the amount you are borrowing and the interest when you take a payday loan. This means that you permit them to withdraw that amount on the due date, as this amount is automatically withdrawn from your paycheck.
Higher Loan Amounts
For first time borrowers, many lenders limit the amount that they will lend. You are only authorized to borrow an amount that is within your salary and the lender’s range.
Once you have repaid the first payday loan in full, your lender can increase the allowance for future applications. For instance, if you get a payday loan of $600 and pay within the due date for the first time, your loan limit can then be increased to $1200, depending on your salary and the lending policy.
State laws determine the minimum and maximum amounts that lenders can give as payday loans. You are informed of the amount you can get during the application process. Remember that paying your loan on time enables you to build a good relationship with your lender. This means that you have access to a faster solution during emergencies.
Final Word
A payday loan is a safe way to cater for financial emergencies. You don’t need collateral, and you can also access the cash within hours. You can apply online without having to visit the lender’s offices or making countless calls to the loan officer. Moreover, payday loans have minimal requirements. Remember that you give the lender the ability to withdraw from your next paycheck when you obtain a payday loan.
