Payday loans are actually good for you
Anybody with an 8-hour day job can bear testimony to how broke you can be in the middle of the month, especially if saving is not your thing or if you have so many bills to settle. This causes financial strain. Worse thing is when you are hit by emergencies. Emergencies could range from medical bills which your insurance doesn’t cover, school fees for your kids, insurance payments, mortgage payments and other types of bills. You need an instant way of getting the cash that you need to sort out these problems. This is where fast payday loans come in.
What is a payday loan?
A payday loan is a short-term loan granted to an individual which he is required to repay back on his next payday. Getting a payday loan is quite easy in fact.
Most payday dealers now work online. This means that you have an option of either going to their offices personally to apply for the loan or apply it online. Physical shops are payday loan direct lenders. You make your way to the offices and apply. The application is reviewed and they will need a couple of your details and information before a payday loan is extended to you. It is the same process if you go online to apply. You will be required to present an identification document, show previous paychecks and evidence that you are actually employed or generally have a source of income. The lender will also need to you to give him with a postdated check for the exact amount you borrowed plus the penalties you will pay in case you cannot repay the loan on time. If you can’t repay your payday loan on time, the lender will encash the check.
When you get the loan the online way, you have to understand that there are two types of lending websites. You have direct lending sites which are direct online lenders, which means you will just have to deal with the lenders directly because they are the ones doing the lending. The other type is a matching site. This means that the site matches the borrower to potential lenders. This established that it is your choice as a borrower to decide what kind of lender you want to go with.
Most people are unsure if payday loans are actually good for them financially. This article explores some of the ways in which payday loans may work for you.
Why payday loans could work for you
Fast and efficient
Emergencies strike at times when you didn’t expect them to. In fact, if you are unlucky, they will come at a time when your wallet is just empty. Payday loans could be your way out. Payday loans are designed in such a way that they are really fast to obtain.
Other types of loans like a traditional loan will take you a few weeks to about a month to know whether you have been approved for the loan. This may not work if you need money urgently.
Payday loans are approved within 6-24 hours.
The application is processed and within a matter of hours, you have money in your pocket. Payday loans are fast, actually faster than most loans out there and thus make it suitable for your emergency situations.
Most loans need to have collateral. For traditional loans and car title loans, you have to leave something as security. In case the borrower cannot repay the loan, the collateral is sold to recover the loan instead. Losing their properties, such as their houses or cars is what most people fear.
Payday loans do not need collateral. All you need to issue the lender is with a postdated check – something which the lender may cash in if you are unable to pay the loan. The check acts as a form of security. This makes payday loans more suitable for some borrowers. Getting a payday loan means that you do not have to worry about lenders taking away your possessions and selling them.
Credit score and most loans go hand in hand. A good credit score means that you will probably be able to get a reasonable interest rate. A good credit score in these tough economic times has become quite unattainable. Most people are deep in debt. It is difficult for people with bad credit scores to secure a decent loan.
With payday loans, a good credit score is the least of your worries. This is because payday loans are tailored to cater to all kinds of situations – in fact, you can get bad credit payday loans. Payday lenders rarely ask for your credit information. Your credit score will not affect your accessibility to the payday loan. This is what makes payday loans attractive to many people.
If you are unable to repay your payday loan when the time comes, you have an option called the rollover option. This entails the extension of the payment duration. Payday loans are usually paid within 30 days. Rolling over buys you an extra 30 days for to make the repayment in full. The rollover option has a catch though The payday lender will take the opportunity to review your loan contract and impose a penalty fee for late repayment and other processing fees for the rollover.
Payday loans are under strict legislations to protect the borrower. Payday loans companies have to strictly adhere to the laws. This means that their interest rates cannot be more than a certain percentage. The legislation on payday loans is on a federal and state level. Through state legislation may vary from state to state, they are all about protecting borrowers from unscrupulous payday lenders.
With all these points, you may find that a payday loan could be a viable borrowing option for you to solve your urgent financial obligations.