Are you searching for an emergency payday loan?
What you need to know
A payday loan is a short-term loan that you can return within two weeks to two months. The period of payback often varies and depends on the particular agreement between you and a lender, but it never exceeds several years.
The application process takes minutes, and lenders respond within one day. Therefore, this type of advance cash appears to be one of the most convenient ways to borrow the cash and immediately return it. At the same time, payday loans are regulated, and terms and conditions differ in various states and countries. This article provides you with general information regarding the subject and doesn’t have any particular instructions.
Payday loan business
Prior to the 1990s, payday loans were extremely rare and unavailable for the customers. Nowadays, many lenders can provide their services online. This option is much more helpful than other conventional and costly methods to borrow money.
Many service providers try to create as friendly websites as possible for those who come for borrowing the money. For instance, a request at paydayinusa.com takes up to several minutes on the main page. The goal of any lender is to ease the process and allow users to have wider choices in comparison to traditional long-term loans.
Payday loans are suitable solutions for tech-savvy, those who like online communication instead of going to banks and dealing with tiresome procedures of acquiring the loan. Everything you need to know is within several clicks, so there’s no lines, no waiting, or any additional fuss with your documents. The lender transfers the needed amount of money to your bank account within minutes.
At the same time, most payday borrowers are those who cannot cover the unexpected expenses (they have no savings, or it is easier to find a payday loan than using your previous deposit at the bank). Similarly to small businesses, it is easier to take a short-term payday loan than to find the money by other methods.
Of course, many advise avoiding taking any loans due to the never-ending borrowing-return cycle, but you should consider this aspect beforehand. As frightening as it may seem, you may return the borrowed money without any troubles or problems in time.
Payday loans vs. other loan options
The major difference between a payday loan and a personal loan lies in basic terms and conditions. A payday loan is an extremely short one, the type due several months, while a personal loan is due to at least two years. Personal loans have a much lower interest rate than payday loans, yet many still consider having a payday loan than any traditional type of personal loan. If you are confident that it will be paid back without extra charges of interest rate, you are playing a safe game for the sake of short-term debt.
Also, payday loans are not reflected in your credit report, and many same-day lenders provide you with the response even if you have a bad credit report score. If you are taking a personal loan and making repayments on time, you have the possibility to be a suitable candidate for long-term loans in the future. In contrast, if you are having a problem with payments, it results in a lowering of your credit score. Therefore, if you wish to improve your credit score in perspective, payday loans won’t help you.
A major similarity between payday and personal loans is that they are both unsecured, so you don’t have to ensure it with any personal property. In other words, there’s no chance for a lender to seize your property if you haven’t made a payment on time. It is a bit similar to collateral when people take a mortgage, and if they fail to pay, they lose the house. For instance, there’s a title loan that also doesn’t require a credit history of a borrower, and allows you to take the low amount of money. However, title loans require an asset as collateral, so if choosing between the two, you pick up the lesser evil.
Another difference between a payday loan and a personal loan is annual percentage rates (APR), and payday loans have quite high-interest rates. Let’s say you take $500 borrowing, but you will have to return $575. Every time you fail to return the loan in time, the amount increases. Therefore, it is highly recommended to take this aspect into account beforehand. Many consider the high APR as a means for these loans to be accessible, but most specialists advise going easy on them.
Payday loans are easier
Even though they are easier, they are often painted as a villain of the story. Traditional channels for loans are hard to find, require a tremendous amount of paperwork even for a small type of loans, and they are not an option for people who have a low credit history in the past.
We all understand exactly why payday loans may be dangerous to take and why you should be aware of all consequences when you take one. Still, sometimes it is the only option that doesn’t involve bureaucracy and carnage.
Most payday loan lenders are available 24/7, they contact you as soon as possible, and sometimes the procedure is completely automated, so you don’t have to spend too much time on the phone to get approved. Many lenders designate only the loan amount and terms, so they are available for you almost immediately.
Why pay the additional interest?
Payday loans are the quickest and available method of covering the expenses that cannot wait. We all have experienced the problem with medical bills, increased electricity costs, or any other ordinary situation where it is impossible to wait for the paycheck from your employer.
Of course, you are not obliged to make the decision right away, and no one pushes you. Learn about all nuances, terms and conditions, and a payday loan will be nothing but a saving hand in a moment of crisis.