What are payday loans and why are they common with short-term borrowers? Well, this type of loan is a short-term loan that is extended to borrowers but are to be repaid when the borrowers get their paycheck. This is the reason that they are known as payday loans. According to Dallasnews.com, payday loans are lent based on the amount one earns and their ability to repay such loans on their payday. These loans are also known as check advance loans or cash advance loans.
Using Payday Loans
There are several things one needs to know about payday loans before one can take up such credit. One of these facts is that these kinds of loans charge a relatively higher interest rate compared to the normal loans people are used to. With payday loans, one needs to be aware of any hidden charges before they take the credit. This ensures that you will be paying for a loan which charges and fee you are fully aware of.
How Payday Loans Work
· One of the things you may want to know about payday loans is how one can qualify for such a loan. Well, you need to prove to the lenders that you have a source of income. The loans are repaid generally in 30 days.
· Payday loan lenders do not base your loan on any credit rating. Sometimes they may also not base it on your ability to repay it. However, the interest rates will generally be high and the fees may be higher for those who miss repayments.
· The process of getting a payday loan is easy. You can visit the stores of payday lenders and fill out an application form and get approved. Many other payday lenders are available online. Once you produce a stub from your employer, you can qualify for the loan.
Advantages of Online Payday Loans
1. Payday loans are convenient
Sometimes one has financial problems that require quick fixes. It may take you quite some time to borrow and have personal loans approved. The good thing with payday loans is that they are availed to you in less than 24 hours. There are mostly no hassles or paperwork needed before you get your loan approved. With the online application, all you need is to log in to your account with the online lenders and fill in the required details. You can do everything while at home and get the money deposited into your account or mobile wallet. This is the convenience that we all require when we face financial emergencies.
2. Your credit score is not checked
This is a great thing for people who have bad credit records. With a poor credit score, most lenders will not approve credit facilities for those who do not comply. As such, people with poor credit scores are assured of loans from payday lenders. However, one has to meet other requirements that payday lenders have put in place. As we are aware, with a poor credit score, one can have a poor-quality life because of a lack of credit facilities. However, with payday loans, you can circumvent these requirements and enjoy financial facilities. Remember also that payday loans are much more affordable than borrowing from individuals or lenders who act like shylocks. All in all, one has to repay their payday loans at the right time so they can enjoy more loans from the lenders.
3. Get money for all sorts of needs
This is another advantage that comes with payday loans. You can use the money borrowed from payday lenders for any needs that you have. Whether you need the money to build a house, do repairs, or for home improvement, payday loans will cover your needs. The money you borrow is not limited to emergencies only. You are not restricted on how you can use the money. With this kind of flexibility in usage of the payday loans, one is at liberty to borrow the money at any time and use it as one wishes.
4. You can prepay without fees or penalties
Most people may not be aware that they can prepay payday loans for free. With most normal or personal loans, one has to repay it till the end of the life of the loan. This is not the case with a payday loan. You can pay your payday loans early enough and suffer no fees or prepayment penalties. For people who want to settle their loans earlier, payday loans are good for you. You may also be interested to know that payday loans are much cheaper than credit cards. Therefore, one need not shy away from these kinds of loans when they need financial redemption.