Payday loans or cash advances have received some bad press in recent times. These loans are also referred to as payday advance, payroll loan, salary loan, small dollar loan, short term loans, cash advance loan, post-dated check loans, quick cash loans, and deferred-deposit check loans. There have been people who have said that these lenders charge high fees. And yet, we have these companies everywhere these days. Thousands of individuals look up to these lenders to sort out their short-term cash crisis situation daily. The fact is that, there is always a huge demand for these loans.
If there is a demand, it means these loans are helping people solve their cash related problems. If it was unable to solve their problems, this business would have closed years back. Though the payday loan business growth has slowed down considerably in the US in the last couple of years.
Why are so many people asking for these loans, when they could have approached the banks and the other conventional lenders? There must be something really great about these loans, in spite of the bad press they have received.
Top 10 Benefits of Payday Loans:
That’s what we are going to find out in this article. Here are the top 10 reasons for getting a payday loan.
1. You can get the money you need quickly – What is your #1 priority when you face a financial emergency? It’s got to be a quick infusion of cash. But banks and other lenders cannot fulfill this need, as they need time to process applications. They have to carry out checks. More time is required for this. The delay can be killing. You could be in deeper trouble because of this delay. Payday loan companies are super-quick in comparison. You get the cash you need in less than 48 hours. This is precisely what you need in an emergency.
2. You can get just what you need – Sometimes, all you need is just a few hundred or thousand dollars, nothing more. Payday lenders will give you just this. Typically, these loans range between $500 and $1000. The amount you can borrow is limited by your income. The process and money with conventional lenders on the other hand is elaborate. Rarely can you get a loan of $500 from a bank. It’s not worth it for them to offer such small amounts.
3. Short-term – The risk is always limited because these loans are always for small amounts, and the term is only for a few weeks. So you don’t have to commit yourself to paying back a lot of money over months and years. You will thus know what you are getting into precisely. Compare this for a housing loan that can be for 20 or 30 years. A lot can happen in these years. There are too many uncertainties here, unlike payday loans, where you have to repay after just a couple of weeks, on receiving your next pay check.
4. Its Highly Convenience – Working with a payday lender is really convenient. These institutions are open beyond the banking hours. You can apply for the home online from your home all seven days in the week. However, if you want, you can apply in person as well. You don’t have to fill-out an elaborate form or answer questions, some of which can be quite personal. There is no hassle of standing in a queue. It is always private. Nobody has to know about your financial crunch.
5. No restrictions – The lending company isn’t going to ask you ever the reason why you want to borrow the money. So you could borrow for anything. On the other hand, banks and other conventional lenders are always going to make too many queries. Sometimes, it feels like you are asking for a favor.
6. Laws and interest rate caps – A section of the media has reported that payday loans are difficult because of the steep interest rate. It has also been said that many people face problems in repaying the money in time because of the high interest rate and fees. The reality is completely different. You should know that there are interest caps in place in every state. Also, there are limits on how much can be charged towards the processing fee. There are specific laws and regulations on payday lending in every state to protect the interest of consumers. Financial regulators are always looking closely at the operations of these businesses. So there is actually no risk for the consumers. And the cash you can borrow is limited anyway. You won’t enter a cycle of debt. There are also lending blocks, where you are restricted to just taking one single payday loan in a period. This too prevents you from getting into a debt cycle.
Note: All our lenders are state licensed adhere to strict guidelines of lending laws of their state. If they are not licensed we do not allow them to enter our network. Our main concern is you our customer.
7. There is no collateral – Conventional lender will give you money only when you can provide collateral, which they are going to seize if you are unable to repay for whatever reason. That is the norm across the world. There is however no collateral in payday loans. This further limits your risk. It is just perfect for those who don’t have any real asset that they can offer as collateral for a loan.
8. Cheaper than credit card debt – Payday loan is business after all, and so, there is going to be a fee. Plus, you will be charged interest for the money you have borrowed. However still, it’s cheaper than credit card debt, which has become a serious issue now as the total debt is valued at more than $900 billion. It has been estimated that the debt per person is more than $4000. It’s a fact that many people don’t have any credit left in their cards anymore. So they cannot borrow money. You can always get a payday loan if you cannot get a credit card advance.
9. No Credit checks – Banks and all other conventional lenders will always check your credit score before deciding whether to make the advance or not. However, there is no credit checking with payday loans. This is why, those even with an average or poor credit score can get these loans. Their applications are going to be approved. In fact, it is the only hope for people with an average or poor score. It is risk free for these lenders too, as the money advanced isn’t a lot, and the term is just for a few weeks as well.
10. Secured information – The information you submit, such as your phone number, email address, income, bank account information, and social security number is always secure. No good payday lender will ever sell personal information to other businesses. This actually falls under the privacy law and its very difficult for them to sell your personal info. They can of course sell you offers, but cannot sell your personal info to anyone. Usually, you will be sending the information over a secured network if applying online. For example when you apply a loan with us, your information is secured when its traveling so in case if a hacker hacks – they cannot make anything out of it. Just make sure that you are dealing with a trustworthy payday company.
Payday loan is indeed a good option to solve a sudden and unexpected cash crunch situation, which can happen to all of us. It is certainly cheaper than losing your home or car. It lets you avoid the embarrassment of having to approach friends or family for urgent financial help.
Thank you for visiting our website. Hope we helped you get a loan.
This is some great information, and I appreciate your point that payday loans can get you money within 48 hours. I live paycheck to paycheck, and sometimes money can get really tight, and it’s always a stressful situation to be in. I’ll definitely keep in mind that payday loans are a short term option that I can use if I need, and that should help relieve some of that stress. Thanks for the great post!