Clicky

Payday loans – Why are they so popular?


Notice: get_currentuserinfo is deprecated since version 4.5.0! Use wp_get_current_user() instead. in /home/cushteec/public_html/wp-includes/functions.php on line 3831

paydayloansuk1Nobody likes or enjoys the idea of being in debt. This is because of the negative connotations that the term debt is associated with. When a person owes money to another person or organization, their financial freedom is limited since any amount of income they will receive will be reduced as a result of the repayment to be made.

Reasons for choosing these online loans

A quick-fix for financial challenges

Money is one of the scarcest commodities around and what this means is that at all times, majority of people operate at a deficit. When this deficit is too much to bear, some people opt to go for payday loans. The thing that sets payday loans apart from other loans is the fact that the granting of this loan is only pegged on the borrower assuring the provide of the loan that they will receive a salary or pay cheque at the end of the agreed period, usually two weeks.

Poor credit rating

If a person is in urgent need of money but has a credit rating that will make banks deny him/her a loan, the only available alternative they have left is usually in the form of payday loans. The reason for this is that the approval process in the lending of payday loans is not as strict as the one followed by banks and other conventional financial institutions. Rather than check with banks on a person’s credit history, payday loan shops only ran a shallow background check on the prospective borrower to confirm that he or she is is employed at a given organization.

No need for prior relationship

Unlike other forms of credit such as loans or credit card debt which one can only qualify for after having a previous financial relationship with the provider who is giving the loan.

A lower chance of dependence

The requirement of a borrower’s physical presence a the premises of the payday loans provider giver him or her a chance to think through their intended spending. This instils some degree of discipline on the person since he or she will engage in cash transactions. If the same person were to opt for credit card spending, the ease with which one is allowed to purchase on credit can trigger unethical spending that only leaves a person in deep debt.

 

Reasons often cited for avoiding these cash loans

 

Avoiding getting into a cycle of debt

Providers of payday loans often charge very high interest rates that prove impossible for the borrowers to pay. When his happens, the person in debt may have to borrow another loan just to offset the earlier one. When this happens, the person’s debt begins to snowball and soon enough bankruptcy will be beckoning on the unfortunate borrower’s door. If you are facing debt then we would recommend this site for help www.nationaldebtline.co.uk.

Lower Interest rates being offered by Banks

Payday loans provide the borrower with small amounts of money whose repayments are often very high. This may push a borrower to ask for more money from a bank because the terms are relatively fair for the borrower.

 

Payday loan use still continuing to increase

It is not a secret that many people find online payday loans attractive and suitable for their needs. These loans have simplified the lives of thousands of borrowers who want quick access to credit to take care of pressing needs. Majority of borrowers are either employed in the private or public sector while other may be self-employed. So what makes these loans attractive?

 

Looking at why they might have increased in popularity

Variety of Lenders

Another interesting thing to note about payday loans is the fact that there are many lenders who provide these types of loans online. Therefore, applicants have the freedom to identify, evaluate, and select lenders that they want to contact.

Simple Requirements

Majority of online micro lenders or online have simplified borrowing by placing simple requirements that should be met by borrowers. In most cases, borrower are required to be registered citizens and employed. They should also have an income that averages £2,000 per month (this varies from lender to lender. In other instances, they might be required to provide the NI number and personal identification documents. Also, majority of lenders do not ask for collateral or assets to attach as security so long as you show proof of being employed and salaried.

Convenient

You may have urgent financial wants in the short term and you may not have the time to apply and wait for conventional loans. This makes payday loans good options of funding those urgent needs. The bank may want to scrutinize your credit ratings and get assurance that you can pay the loan. This process is just too long to endure when you want the cash really badly. But with cash advances, applicants are not subjected to scrutiny or examination of credit rating per se. This means that anyone with a poor credit score can still qualify to take these loans. Therefore, these cash advances come in handy to ease your financial burden.

Easy to Access

One can easily access payday loans remotely from home or office. Therefore, you don’t have to worry about paperwork or having to deal with representatives or loan officers from the financing company. And, you don’t have to queue hours on end to just make an application for a small loan.

Easy to Apply

Majority of borrowers also find that it easy to apply or access online payday loans than normal loans. The applicant is only required to register with the lender and submit an application for the loan. Once the application is reviewed and the borrower meets the lending requirements, the money is processed and deposited into the borrower’s account. In some cases, one can get the funds within the same day or after 24 hours of making the loan application.

Quick Correspondence

The other reason why people find online loans attractive is because the transactions are convenient. The borrower doesn’t have to come into direct contact with the lender and this cuts down the time that would have been spent in applying for the loan. This means that applicant does not have to make personal inquiries on the status of the loan. Notifications are made via e-mail.

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk