Payday loans have been relied upon by an ever increasing number of people to tide them over through tough financial times as they wait for their wages. The ease with which a person can obtain the loan together with the fact that you do not require to provide collateral or have a good credit record to qualify for one attracts many people to apply for payday loans when faced with small cash emergencies. So are payday loans available for those that are self-employed?
The answer to that question is Yes!
Cash loans for self employed persons are available in the same way as payday loans for those employed are. Same day and within 1-hour of approval.
In recent times however there have been concerns over the lengths to which payday loan lenders will go in order to maximize their profits. There are regulations in most states limiting the interest rate that lenders can charge on payday loans. Lenders however have been known to find ways to circumvent the laws and come up with clever ways of increasing the interest charged so as to maximize their profits.
Some payday loan lenders have also been accused of encouraging people to roll over their debt which gives the lender additional profits through the additional interest charged when the loan extends beyond one month. Payday loan lenders charge compound interest so the amount of money charged on top of the increases drastically when the loan is extended over a longer period of time.
With payday loan lenders charging as much as 300% compound interest on the loans it is easy to understand why the loans spiral out of control if the borrower cannot pay them on time. An example is the payday loan lender Wonga which has come under a lot of criticism in recent times as a result of what financial experts term as irresponsible lending and basing its business on the inability of people to pay back on time.
Payday loans have also been cited by financial experts as contributing to the debt cycle that majority of the people are finding themselves in, if you are experiencing this then help is at hand through this website.
Bank loans usually require collateral and a good credit record in order for a person to qualify for one. Payday loans on the other hand do not require a good credit history and are open to practically anyone as long as they have been in employment for at least two months.
This has encouraged people including those who are already carrying a considerable amount of debt to take on additional debt in form of payday loans to deal with small cash emergencies. People have been known to take payday loans to pay off other debts for example credit card debt. Instead of helping such an action ends up landing the person in a debt cycle where they have to constantly take payday loans in order to survive from one payslip to the next.
The ease with which one can get a payday loan has also been criticized by financial experts as encouraging people to acquire debt in order to afford items that are not really necessary. Before the introduction of payday loans a self-employed person would have to save for things like vacations, entertainment and shopping sprees. Payday loans have changed all that with many self-employed people opting to apply for a payday loan when they feel like taking a vacation or indulging in a shopping spree. Unlike bank loans where the borrower needs to convince the bank that their reason for borrowing money is worthwhile, payday lenders do not really care or enquire what the money is for. This encourages self-employed borrowers to take up debt for things that would have been better achieved through saving.
Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk