When faced with a financial emergency, a payday loan is one of your best options. The loan allows you to pay unforeseen costs or late bills before your next paycheck comes in. No need to pay penalties for making late payments. Because a payday loan is paid with your next paycheck, you will only be in debt for a few weeks or even shorter. Besides that, and compared to other forms of credit, payday loans offer five other important benefits.
Lenders usually approve applications for payday loans nearly instantly as soon as you provide the needed information. It’s a fairly quick and direct process. There’s no need to fill any lengthy forms as you usually have to when applying for traditional loans. You may have to wait a few hours or the next business day for the lender to transfer the funds to your bank, but that’s usually as long as it can get. In some cases, this can happen within an hour if everything looks good with your details. Lenders often make it a point to provide speedy services as a way to compete and attract clients.
The whole payday loan application process is done on the Internet. There’s no need to book an appointment with a loan officer or keep calling a lender to follow up. You can practically apply from your home or office, at your dentist’s office or a coffee shop or wherever. To get a traditional loan, you need to meet with your loan officer a number of times. One big advantage a payday loan offers, as opposed to a credit card, is that you get your credit as cash.
The requirements for getting payday loans are very basic, such as a consistent and provable income, permanent residency, an active checking account, and being 18 years of age. Though typical loans may need collateral, payday loans do not. As long as they can establish that you will be able to pay the borrowed amount, they will give it to you.
Payday lenders often put a cap on the loan amount they can allow new clients to borrow. Usually, you will only be approved for a sum that is right within your salary range as well as the lender’s. But as soon as you have paid off your first loan on time, your loan limit will usually go up, depending on your state laws.
Keeping Your Credit Rating in Check
An installment loan usually gives you one or two years to repay, but the problem is, anything can happen within that period. You may lose your income, become sick before you have paid off the loan, etc. The short repayment period that generally comes with payday loans may feel like a flaw, but it is actually favorable for those who want to protect their credit rating.