Originally posted on https://bonsaifinance.com/financial-issues-benefits-of-payday-loans/
Payday loans are one of the best ways to get quick cash when you’re in a financial emergency. This type of loan can be used to pay late bills and any unexpected expenses before you get your next paycheck. It can save you from incurring late fees, and much more. Primarily, you pay the amount due (and interest) with your next paycheck, which usually means you’re in debt for just a few weeks. Learning about their benefits can help you determine if it’s the best option for you.
In most cases, lenders can approve an application for these loan options almost instantly. Many times, you can fill out the short form online, which means you don’t have to drive to the lender’s physical location for the preliminary work. While it can take up to 24 hours to have the funds transferred to your bank, you can access the money as soon as it is in. This is primarily done because the lenders try to remain competitive with each other to offer the fastest services.
Convenience of Payday Loans
Usually, all of the interactions and processes that are involved with payday loans are handled online. You don’t have to request an appointment with the loan officer or call multiple lenders to get your money. While you’re at home (or anywhere with an internet connection if using your smartphone), you just send the application electronically. As such, you get cash in your bank account. With a credit card, you can only use it for services and goods. Money can be used to pay bills, pay back a loved one, and much more.
Traditional loans are typically used for specific purposes. For example, a car loan can only be used to buy a vehicle. However, a payday loan can be utilized for any purpose.
Fewer Requirements/Background Checks
Conventional loans usually require an extensive background check and credit score check. It’s much easier to be turned down for this type of loan. However, a payday loan is easier to get for many people. As long as you are 18 years old and have a stable income source, you’re likely qualified. Of course, an active checking account is also needed.
Therefore, past financial struggles and mistakes aren’t going to hold you back from getting the money you need.
Get More Money
This benefit can take time to see, especially if you’ve never gotten a payday loan before. Typically, these lenders put limits on the amounts that new borrowers can get. However, when you pay that loan off and request another, you can likely get a higher value.
Of course, the amount of money you can get is based on your salary range. As such, each state has different laws in place, governing the maximum amount that a lender can give for a payday loan. You can find out how much money you can get during your application process.
It should be mentioned that it’s best to get just enough money to cover the emergency expense. If you take out a loan for too much, you run the risk of payday-loan debt where you continually have to get a new loan each paycheck to cover expenses.
Protect Your Credit Score
Because there is such a short repayment period for payday loans, it can seem like a shortcoming at first. However, this can help to protect your credit score. Installment loans typically take one or two years to repay it, and anything can happen during that time. Defaulting on the loan can lower your credit score, but with a quick payoff (usually two weeks), you can pay it off fast and keep your credit rating in check. Consider getting a payday loan from a reputable company to help you out of a financial situation today.