The Advantages Offered by a Payday Loan
One of the best ways to meet an urgent financial need 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.
Aside from that, there are other important advantages to a payday loan compared to a typical loan.
Applying for a payday loan, you will get a response, whether positive or negative, almost instantly after you submit your application. You need fill extensive forms as conventional loans require. 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 strive to maintain a high speed of transaction to remain competitive.
All payday loan transactions are 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. As long as you are online, you can transact with a payday loan provider whether you’re at the office, at home or wherever. With a conventional lender, you have to talk to your loan officer personally several times. One advantage of a payday loan to a credit card is that you will get your credit in cash and spend it however you want to.
A payday loan is easier to access because the requirements are fewer and simpler. 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. Provided you can prove that you have a stable income that can pay off the money you borrow, you’re all good. Other usual requirements are an active checking account and proof that you are a permanent resident in your state. The common age requirement is 18.
Most payday lenders put a limit to how much you can borrow as a first-timer. After that, your provider will raise this limit, allowing you to borrow more next time around, depending on their policy and your salary.
Credit Rating Protection
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. Typical loans give you about one to two years to repay the money you borrowed. But who knows what can happen in that stretch of time? You could lose your job, you could fall ill, etc. etc. etc. You pay a payday loan right on your next payday, and that’s about it. All fresh again.