Everybody gets strapped for cash at some point in their lives. People in this situation should consider applying for a payday advance loan. These loans were created to help people get through financial emergencies.
Why Should People Take Out Payday Loans Over Regular Loans?
In the past, the only options borrowers had were credit cards, overdrafts and personal loans. While these products have their benefits, they also have drawbacks.
Credit cards are not ideal as they are what lenders call “revolving credit”. This means that people can borrow money, pay off the borrowed amount and then borrow it again. This creates a cycle of debt that is difficult to break.
While personal loans can be good products, they are hard to obtain. Banks tend to prefer customers that are earning a high income, have low debt levels and a clean credit rating. People who do not fit into these categories may find that their application is declined. Not to mention, bank loans can take weeks to process.
The Benefits of Payday Loans
A payday advance loan is a quick and easy loan that people use for unexpected expenses. Listed below are some of the advantages of payday loans.
1. The loan application process is quick. People can apply for a loan and have it paid out within an hour. These kind of processing times are unheard of in the traditional banking environment.
2. The customer can apply online instead of making a trip to the bank or completing a phone application.
3. Banks often require their customers to borrow a specified minimum loan amount. With cash advance loans, borrowers can take out as little money as they wish.
4. The term “payday” is used because the lender expects the loan to be paid off on the borrower’s next pay cycle. In reality, lenders give borrowers approximately 30 days to pay off their loan. The advantage of this is that borrowers will not have debt hanging over their heads for the next 6 months.
5. Payday lenders accept almost all loan applications. The only times they will decline an application is when the borrower is under the age of 18, unemployed and/or currently bankrupt. As lenders do not perform credit checks, these loans are suitable for people with bad credit.
6. All fees and interest charges are disclosed up front. Due to their high interest rates, payday loans have gotten a lot of bad press over the years. The end result is that the market is heavily controlled and monitored. Payday lenders are required to be transparent and clearly identify their charges. The benefit to the consumer is that they know exactly how much they will have to pay back without any hidden fees. See also CNN News
The benefits of cash advances outweigh their drawbacks. Borrowers who still have questions about payday loans should contact their loan company. Most companies will have customer service staff on hand to answer product related questions. These loans are best suited for emergency expenses such as car repairs and overdue bills.