A payday loan is one of the best ways to get hold of quick cash for anyone dealing with a financial emergency. The loan allows you to pay unforeseen costs or late bills before your next paycheck comes in. It saves you from late-payment penalties. You pay a payday loan with your next paycheck, which means you will be in debt for merely a number of weeks or even just days. Aside from that, these loans have five other key advantages compared to other types of credit.
With most lenders, applications for payday loans are approved almost right then and there, provided you have given them all the necessary information. It’s a fairly quick and direct process. No need to fill any lengthy forms, which is usually the case with conventional loans. It may take you hours or the next working day to receive the cash in your bank account, but it usually doesn’t take longer than that. Sometimes, this can even transpire in just an hour as long as all your information is good. Many lenders prioritize quick services as a way to compete in the market.
The entire process of applying for a payday loan takes place online. You need not set an appointment with a loan officer or keep ringing your lender to know the status of your application. Your application may be sent in from your home, office or practically anywhere. Getting a conventional loan means meeting with your loan officer several times. With a payday loan, one huge advantage you enjoy over a credit card is your credit arriving as cash.
Payday loans have very basic requirements, such as a steady and verifiable income; an active checking account; permanent residency in your state; and the age requirement, which is usually 18. Though typical loans may need collateral, payday loans do not. Provided you can prove your ability to repay the money you would like to borrow, they will approve your application.
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
Installment loans may let you pay off your loan within a year or two, but the issue is that a lot can occur within that time. You may lose your income, become sick before you have paid off the loan, etc. Payday loans’ short repayment period may seem like a disadvantage, but it can actually protect your credit rating.