The Advantages Offered by a Payday Loan
When facing an emergency financial need, one of the best solutions is a payday loan. This loan can help you pay for unanticipated expenses before you receive your salary, and even save you from the penalties of late payments. As hinted by the term, a payday loan is a loan you pay on your next payday, so you will only be in debt for a week or two.
Apart from that, payday loans offer other advantages over conventional loans.
Applying for a payday loan, you will get a response, whether positive or negative, almost instantly after you submit your application. There is no need to fill lengthy forms that are common with traditional loans. In most cases, you will receive your loan within the day or at least on the following day, depending on whether or not you have complied with all of the lender’s requirements. Lenders are always conscious about their speed of transaction because they know it gives them a competitive edge.
When applying for a payday loan, all transactions will be conducted online. You don’t have to talk to a loan officer in person or call the lender several times asking for updates on your application’s status. No matter your geographical location, you can transact with a payday loan provider as long as you are online. With a conventional lender, you have to talk to your loan officer personally several times. One advantage of a payday loan compared to a credit card is that you will receive your credit in cash, allowing you to spend it in any manner you want.
Fewer, Simpler Requirements
Obtaining a payday loan is easier as you only have to meet a few basic requirements. For example, the main requirement is that you have a stable source of income, while traditional loans need you to put in collateral too. Collateral is not needed for a payday loan. As long as you can prove that your income is stable and enough to pay off your loan, you’re good to go. Other typical requirements include registration as a permanent resident in your state and an active checking account. You also have to be over 18 years old to qualify.
A lot of payday lender limit the amount that you can borrow for the first time. After that, you will be able to borrow a bigger amount, depending on the lending policy and of course, your income.
Lower Risk to Credit Rating
Lastly, because of its short repayment period, a payday loan may seem disadvantageous, but the opposite is actually true if you think about protecting your credit rating. With a typical loan, you have about one to two years to pay off the cash you loaned. But who knows what can happen in that stretch of time? You can get sick, lose your source of income and so on and so forth. You pay a payday loan right on your next payday, and that’s about it. You have been refreshed.