Payday loans are loans that you pay back on your next payday. They are also called instant cash loans, cash advance loans, quick cash loans, payroll advance loans, and many other names. These loans are obtainable by going to a lender of such loans or by finding a lender online. The cash that you get is really quick cash; you can expect the cash to arrive to your bank account in no more than a week.
One word: emergencies. When you need money for emergencies, such as medical care requiring immediate attention, to whom do you turn? Do you get loans from banks or large lending institutions? You don’t, because the process takes long. You have to submit plenty of documents and you have to undergo interviews. What’s more, you have to submit your credit record to them.
Here’s how payday loans work: You find a lender of these loans and then you submit just a few pieces of information, such as your name, your job, and your bank account number. There are some more, but these three are the most essential. What happens is that you get a loan agreement, and then in less than a week, the amount that you have borrowed will reach your bank account. In online transactions of these loans, the process will take just minutes and you can get the money at the same day or at the next day.
During your next payday, the amount borrowed will get debited from your bank account. Then everything’s back to normal. You’ve paid for the emergency and at the same time you don’t have to worry about the loan anymore.
The main use of payday loans is to provide money for people who need money but don’t currently have money because they have spent it all for essential needs. One problem among salary-earners is that they seem to have plenty of money during the few days after they get their earnings, but beyond that, they generally have little money. Suppose emergencies arrive at those times when money is lacking? Quick money is needed.
With regards to borrowing times, payday loans are flexible. You can borrow them at any day. If you’ll be getting cash advance loans online, you can borrow any day at any time of the day. You can pay back at any agreed upon date, even if it’s not payday.
Another advantage – one that is major – is that your credit record isn’t checked during borrowing time. Even with a bad credit record you can get a payday loan. That makes such a loan a lifesaver at times.
The interest rates charged for payday loans are way higher compared to the rates for regular loans. Usual interest rates for cash advance loans are 20-25%. Furthermore, there are many sharks that charge as much as 1000% interest rate! Don’t fall for them; opt for the lenders whose rates are reasonable.
Given the advantages, payday loans are always here to stay. Surely they serve emergency needs rightly and they have plenty of advantages. But we should be wary of the main disadvantage – high interest rate – and avail of payday loans only when absolutely needed.
Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk