Pros and Cons of Payday Loans

 

Along with the popularity of the online payday loan lenders, more people have considered to get this kind of loan when they are short on a budget or whenever a monthly paycheck is not enough to pay the utility bills and other necessities. Payday loans are easier and convenient. The application can be done online, not to mention a fast approval. Unlike other types of loans such as banking loans or personal loans, payday loans do not require a lot of documents in order to be approved. The only differences are the amount that can be borrowed is smaller than those other types of loans available, and the interest rate is higher than the rest. Therefore, it is an essential to be sure of realizing the decision of getting a payday loan and paying it off on the next payday.

Pros of Payday Loans

Payday loan lenders only allow their customers to borrow a minimum amount of money of $100, and a maximum of $800. The process can be completed in a single day. Another good thing about payday loans is that they only require a few qualifications to have the application approved. It only requires their customers to be currently employed with an active US bank and checking account, not to mention, of legal age (18 years old or older). As the application form is filled in, it will be sent and reviewed. The form isn’t complex as what other types of loans have. Customers need to fill in their name, address and other important information. After a maximum of 24 hours, the loan will be approved and money will be sent and deposited to their bank accounts. Payday loans or also known as quick cash are offered to their customers for whatever purpose it would serve. Whether the money is intended for emergency purpose or for dream vacation, payday loans are solutions to financial needs. 

Cons of Payday Loans 

Whenever there is a need to borrow for a larger amount of money, payday loans may no longer be able to meet the need. Another reason people do not enjoy getting payday loans is that they are liable for the full amount of money borrowed. Say borrowing $500 from a payday loan company. It is expected the full amount plus the interest rate will be paid off in full on the next payday. Otherwise, it can damage the credit. Unlike other types of loans, customers are able to pay it following a payment system. Therefore, before getting a loan, have confidence in paying it back the moment the next paycheck is received. Lastly, the interest rate is higher than those from other types of loans. Payday loan companies have reasons in keeping a higher interest rate. Consider it a win-win situation between their customers and the lending company. Since they approve the application and do not require too many documents, security can be the main reason.

In conclusion, getting a payday loan should not be considered bad after all. Keep in mind that the money provided can meet the need.