The Advantages Offered by a Payday Loan
When facing an emergency financial need, one of the best solutions is a payday loan. This loan can help you pay for unanticipated expenses before you receive your salary, and even save you from the penalties of late payments. As the term indicates, a payday loan is payable on your next payday, meaning you will be in debt only for a period of weeks.
Apart from that, payday loans offer other advantages over conventional loans.
When you apply for a payday loan, you will get feedback – positive or negative – almost immediately after filing your application. You need fill extensive forms as conventional loans require. In most cases, you will receive your loan within the day or at least on the following day, depending on whether or not you have complied with all of the lender’s requirements. Lenders always strive for a high transaction speed because it gives them an advantage over their competitors.
When applying for a payday loan, all transactions will be conducted online. You don’t have to talk to a loan officer in person or call the lender several times asking for updates on your application’s status. As long as you are online, you can transact with a payday loan provider whether you’re at the office, at home or wherever. With a conventional lender, you have to talk to your loan officer personally several times. One advantage of a payday loan to a credit card is that you will get your credit in cash and spend it however you want to.
Obtaining a payday loan is easier as you only have to meet a few basic requirements. For example, the main requirement is that you have a stable source of income, while traditional loans need you to put in collateral too. Payday loans don’t need you to provide collateral. After proving that your income is stable and enough to pay off the money you borrow, you’re all set. Other typical requirements include registration as a permanent resident in your state and an active checking account. You should also be above 18 years old to apply.
A lot of payday lender limit the amount that you can borrow for the first time. After that, you will be able to borrow a bigger amount, depending on the lending policy and of course, your income.
Lower Risk to Credit Rating
You may dislike the short repayment period that a payday loan comes with, but it’s actually an advantage when you think of safeguarding your credit rating. If you apply for a regular loan, you have around one to two years to pay it off. But anything can happen within that time. You could lose your job, you could fall ill, etc. etc. etc. You pay a payday loan right on your next payday, and that’s about it. Clean again.