The overwhelming majority of Americans, or almost about 80% do not have other sources of income, except their wage. At the same time, a large proportion of this part of population does not have financial savings. Thus, people doom themselves to life from paycheck to paycheck, which makes the emergence of any unforeseen situations, involving costs an intractable problem. That is why payday loans are already so popular. They provide an opportunity to quickly solve the problems to those people who have no other options for this. Payday loans have their own nuances, so if you intend to use such a loan, you should learn more about advantages and disadvantages of payday loans. To do this, read on our guide.
What are payday loans?
These are fast loans, providing people with financial support for paying off debt from the next paycheck. Payday loans are short-term loans, most often issued for a period of two weeks to a month, although there are exceptions and a longer period for which they can be issued. Usually they are repaid by one payment on the day the wage is received.
Payday loans this is a good way to solve a financial problem that suddenly arises and for those who do not have perfect or have very bad credit. Lenders rely on your confirmed monthly income when making a decision on lending you.
The lenders who deal with this type of loans are in most cases online companies and the entire process of applying for, approving and receiving money takes place online. This makes such loans very convenient, but at the same time they mainly have high interest rates, as well as penalties for late repayment.
Further you may learn more about the pros and cons of payday loans.
+ Fast cash
In extreme financial situations it is very important to take action quickly in order to solve the problem with minimal losses. Such an opportunity is provided by payday loans, which within a few hours allow you to receive the necessary money to solve your troubles.
Other types of loans most often have more complex and lengthy procedures for applying, considering it by the lender and getting you money. Under the pressure of circumstances and time this may be unacceptable for you.
+ High likelihood of approval
Most applications for payday loans are approved by most lenders. In many cases, you can be approved without a thorough check of your credit rating and your credit history.
This makes payday loans especially relevant for those who have bad credit. Such people most often are not available other types of loans and payday loans become almost the only chance to solve financial difficulties.
– High interest rates
High payday loan rates are due to high risk for lenders. The higher the risk to the lender, the higher the interest rate becomes, so such loans may be too expensive for some borrowers.
Usually payday loans are issued for a period of 14 to 30 days. For many borrowers it becomes very difficult to roll with the money in such a short time and then they fall on various penalties without paying on time.
– One payday loan may entail another
If you do not quite correctly calculate your financial capabilities, then you risk get into a situation where you need to take another loan in order to be able to pay off a payday loan.
You must correctly understand how much you will have to pay on a loan from your wage, since payday loans are paid from your salary in one single payment.
Yes or no to payday loans?
Payday loans have their undeniable advantages and also noticeable disadvantages, in general, like any other types of loans. The main criterion in deciding whether to take a payday loan should be the understanding whether it is suitable for you in your circumstances.
If you have good credit and have the opportunity to wait a few days, then maybe it would be better for you to use one of the other types of loans. At the same time, having bad credit and being under the pressure of circumstances and not being able to wait longer than a few hours, you will hardly find many other opportunities to solve the problem.
You can apply for a payday loan using the form on our website and get an almost instant response from a variety of lenders. Due to this, you will have the opportunity to choose the most suitable loan for your circumstances, because now you know all the advantages and disadvantages of payday loans.
If you need advice, you can write to us and our experts will help you to determine the choice of loan.