Payday loans are among the best ways of raising cash fast when you need to solve any financial emergencies.
The loans help to pay for any bills or unexpected expenses when you are still waiting to be paid your salary. They can save you from being hit by penalties that could well be imposed when you make payments late.
Payday loans are payable when you next get a paycheck. This means you only need to be weighed down with debt for just a few weeks. Indeed, a payday loan has a variety of advantages over many other types of credits.
The main benefits are:
1. They’re fast
The majority of lenders approve an application for a payday loan so quickly it feels almost instant as long as you have provided the required information.
The application process is not only simple, but it is also quick. You don’t need to fill out long drawn out forms like you would with a conventional loan. The lender may take time to transfer funds but it will be on the same day or the following working day.
There are some lenders who are able to transfer funds within the hour. Because the market contains a large number of lenders the pressure is on for the lenders to provide their services quickly if they are to be perceived as competitive.
Conventional credit card and loan applications can take a long time to be processed. You can find yourself waiting several weeks before you are able to access any funds, which is not at all helpful if you find you have a financial emergency.
Plus, there is no guarantee your request is going to be approved. However, when applying for payday loans, you can expect to receive feedback on your application’s success or failure within the hour. Some lenders even provide feedback instantly. It means if your application is unsuccessful, you are able to look elsewhere for help immediately.
The process of applying for payday loans is always conducted online. There is no need to book any appointments or call your lender to get the cash you need. You can apply from wherever you have an internet connection whether you are at home or in the office.
Obtaining traditional loans invariably involves many meetings with a loan officer. A major advantage of payday loans over credit cards is that your credit is received in cash, so you can do more than simply buy goods or pay for services as with a credit card.
You are able to spend any cash you receive from a payday loan on things like paying an electricity bill or getting your car repaired.
Another benefit of payday loans is that they are not issued for specific purposes as with many conventional loans. For example, car loans and only be used to buy cars, home mortgage are for buying property.
With payday loans the paperwork is minimal. Sometimes no documents need to be sent at all, so there is no scanning, faxing, or posting, although there are payday lenders who do ask for some proof of income. But the required documents can be faxed or emailed within minutes.
2. Only Basic Requirement
To access payday loans is easy because only a few basic requirements need to be met. The most important of these is having some stable source of income. When your income can be shown to be consistent and this is verifiable, it is almost guaranteed that you can find a lender who is willing.
In the case of traditional loans, it is common for collateral to be called for. No collateral is needed to obtain a payday loan. A stable income is enough for the lender to accept you are able to repay the amount you borrow.
It’s possible you may also need to demonstrate you have access to an active checking account and are registered as a permanent resident in the state where you reside.
To get a payday loan, you should be over the age of 18. If you have a permanent job you most likely meet all the requirements. Conventional lenders check your credit score and if it’s poor, you will doubtless be disqualified from obtaining a conventional bank loan.
With a payday loan, bad credit is not a problem when you are able to prove your ability to pay it within the time limit. Although online lenders may check your credit score, they will make their decision based on your current financial position. You will not be limited by any historic financial errors or struggles.
4. Qualifying for Higher Amounts
A large number of payday lenders do limit the amounts they will loan to new borrowers. Usually, you are only able to access amounts within your salary range as well as the lender’s range.
But, if you pay back your first payday loan on time, the lender may boost the amount you are able to borrow in any subsequent applications. For example, when you borrow $500 and pay it back on time, the lender may be able to increase your subsequent limit to $1,000 over time depending on the lender’s policy and what you earn.
The maximum and minimum amounts lenders offer for payday loans depend on the laws in the specific state. Your lender should tell you what amount you should be able to receive during your application process. By paying your payday loans on time allows you to build a good relationship with the lender. This means you will likely have a fast solution to financial emergencies always.
5. Protect your Credit Rating
The fact you only have a short time in which to repay payday loans may seem like a shortcoming but it is actually an advantage when you desire to protect your all-important credit rating.
When you apply for an installment loan, you have between one and two years in which pay the loan back. Of, course none of us can tell the future and anything can happen in time.
For example, you may lose your income-earning ability, you could fall ill prior to completing paying back the borrowed amount. If there is no alternative source of income you can easily miss installments, for instance, while you are looking for another job.
Doubtless by defaulting on a loan worsens a person’s credit score. They can also incur fines and a penalty, increasing the loan’s cost. A credit card can appear to be convenient but you still have to maintain control of your spending to make sure your credit rating is protected. The majority of cardholders admit controlling spending is hard. It’s easy to spend more than can be afforded, which will worsen your credit rating, especially if you possess more than a single credit card.