In spite of the many challenges that come with payday loans, they may help you a great deal. Payday loans are used as a backup which may help you avoid borrowing from friends or family members. The advantages with payday loans is that they are usually short-term loans. Furthermore, cash is always ready to be remitted to your account as a loan.
These loans are also helpful in paying for bills which you didn’t expect.
Payday loans usually have clear terms when it comes to lending. They have no secret or hidden charges. According to research, many people took up these loans out of desperation. You may pay back through recurring payments. This eases the burden of paying back the whole lump sum at one go.
Borrowing from direct lenders may save you the worry of having many spamming messages on your phone or email. Many counterfeit lenders steal your financial information and sell it to third party companies that offer payday loans. This information is used by the companies to send you messages that entice you to take up payday loan offers.
How it works
Getting a loan, especially when you have recently joined the workforce without having any bad credit history may be a challenge.
Banks and other credit facilities will always want to check your credit history before lending you any money. With this in mind, banks may not be the best alternative for quick cash. However, with payday loans, you can request a loan without having any credit history or even when you have bad credit history. This is the difference between a bank loan and a payday loan.
During emergencies, you cannot wait until your next payday or till you get good credit history. This is where payday loans are preferred. However, like borrowing from a bank, it is better to borrow from a reputable direct payday lender who will give you flexible time to repay the loan. One of the most popular ways to repay is via installment loans from direct lenders who give you loans immediately.
They also act as a direct lender and give you the option of taking up installment loans. As they don’t look into your credit history, you are assured of acquiring a loan even if you have a bad credit score.
Characteristics of a payday loan
- Most payday loans have a maximum loan amount of around $1,500.
- These loans are often due on your next payday. However, you may arrange with the lender to be paid back in installments.
- You can only borrow what you are able to pay back. Lenders will often ask for some evidence detailing your monthly wages.
- You must give your lenders access to your checking account for them to deposit the loan amount.
- You may incur a fee when borrowing a payday loan.