No matter how careful or cautious you remain with your finances, emergencies turn up when you least expect it to. Everyone had experienced financial troubles at least at some point in their lives. It can be a couple of sudden bills, home expenses, or medical emergencies that make it imperative for you to look for additional cash to tide over the situation. And, payday loans can come in super-handy in situations like this.
But, what exactly are payday loans? Are they the right option to ‘find cash loans near me‘? Read on to find the answers to all your questions right here!
What Exactly Are Payday Loans?
Payday loans are the short-term loans available online, which can be accessed with minimum paperwork within a couple of hours for emergency purposes. The idea is to pay this loan back on your upcoming payday, and hence the name. Usually, these loans have per day based interest charged on them, which is comparatively higher than personal loans.
These are meant to help you deal with sudden expenses or bills that might pop up before you have your next paycheck in hand. The money reaches your account directly, and you can spend it as you need and repay it with interest within the following weeks, rather than years or months.
Pros of Opting for a Payday Loan in an Emergency
Payday loans have always received a bad rap in so many ways. They have been called unreliable and untrustworthy. Some people have gone to the extent of calling them one of the worst things you can do to your finances. However, payday loans are not all that bad, and the following pros are proof of that.
1. The Convenience Factor
There might be situations where the salary did not get credited on time, but you need some urgent cash for emergencies or even daily expenses. Moreover, taking the money from conventional moneylenders usually involves a lot of paperwork, and even then, the amount won’t reach you in a day.
Payday loans give you the necessary amount within a couple of hours without much paperwork. In most cases, all you need to submit are your salary slips for the last three months, security checks, bank account statements, and your application form.
2. The Reliability Quotient
The biggest problem with borrowing from a moneylender is that the payday loan might not reach you when needed. Your family and friends would also not be able to lend out a considerable amount for emergencies, such as medical bills or car repairs.
Your best bet in situations like these is to avail of an online payday loan. These loans not only make your chances of getting the money higher but also involve fewer hassles than the usual options in the market.
3. Your Credit History Doesn’t Matter
If you have a poor credit history, securing a loan from an established and conventional financial institution becomes difficult. These institutions view your poor credit history as the mark of your unreliability, but things are different with payday lenders.
Online lenders of payday loans will only look at your present financial situation instead of paying attention to the past credit records. Unlike traditional lenders, payday lenders will not hesitate to give you the loan even when you have a poor credit score.
4. Faster Processing
Another benefit of availing of payday loans is that you can get it quickly. Most of the lenders approve it as soon as you apply. In other cases, it might take 24 hours, not more than that.
5. No Need for Several Documents
To avail of such loans, you need to be at least 18 years old and have a permanent address and an active account. It requires no collateral.
The Cons Associated with a Payday Loan
Besides these pros, a few cons are associated with these loans, which have been outlined below.
1. The High Rate of Interest
There is no denying that payday loans are expensive. It tends to make some borrowers trapped in a debt circle because they can never repay the complete amount with the schedule.
2. Time Constraints for Repayment
Time constraints, along with the loan’s high-interest rates, become a significant problem for the borrowers. Some lenders might offer a few months repayment, but most of them expect you to pay the entire sum in a day, which is troublesome. After all, you’ll have to take care of the monthly expenses, too, after the repayment.
3. Lenders Are Ruthless
If you fail to return the borrowed amount on time, the lenders will not hesitate to call you any time of the day and night. They can take some drastic steps too.
4. Accessing Your Bank Account
Some payday loan lenders might ask you to give them access to your bank account so that they can get the amount back as soon as your salary comes. You might have to pay overdraft fees because of their failed and repeated attempts.
5. No Cancellation Policy
Unlike traditional loans, you can’t cancel the application of payday loans once you submit it, and the lender approves it.
Payday loans are nothing short of a quick fix that lets you have the amount you need, minus the hassles of conventional loans. But, if you plan to go for the loan, you will have to be cautious enough to avoid the pitfalls mentioned above.