January 23, 2020, 9:59 am

Four Benefits of Payday Loans

by: The Financial Blogger    Category: Types of Financial Products
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Payday loans have many benefits, especially if you’re struggling financially. A payday loan can be a lifeline when times are tough. We all need extra money from time to time, whether this is to cover an emergency or unexpected bill, and a payday loan could be the way to go if you need to borrow a small amount over a short period.

In this article, we’ll discuss the benefits of payday loans and how it can help you in times of need.  

First, what is a payday loan?

Cash Lady, an online credit broker, explains it perfectly: A Payday loan is a form of short-term credit, often used by people who require cash quickly to help them through a financial emergency.

Payday loans allow you to obtain funds in a quick and efficient manner, which is ideal in a crisis. The interest rates are usually high, but you borrow the money over a shorter period, usually from 61 days to 12 months. Therefore, you are not trapped by years of repayment.

Shorter Period, Lower Borrowing

With a personal loan, you borrow a large amount (the lowest you can borrow is usually $1000) and have to pay it back over a long period, typically over years. If you only need to borrow a small amount, a personal loan probably isn’t the best borrowing method to go down.

Whereas, payday loans range from £/$100 – £/$1000 and are paid back over shorter periods. This means you won’t be stuck with the debt for years and will often pay it back in months.

Fast and Convenient

If you need money fast and don’t know where to turn, a payday loan could be the quick solution you need. Compared to other types of loans payday loans can be really fast to organize, and you can usually complete the application online with minimum personal details needed. So, if an emergency does crop up and all other avenues have failed, this might be the way to go. 

Easy to Secure

Personal loans always require a credit check. The big banks/lenders will not lend to you without a check, and they certainly won’t lend to you if you have a bad credit rating. Therefore, if you have a bad credit score and need money fast, applying for a payday loan would be one of the best options to explore. You will not usually be declined for a payday loan if you have a bad credit rating.

A Lifeline

Car repairs, unexpected bills, broken appliances – most people will likely face these emergencies in their lifetime, and the unfortunate thing is, they usually happen out of the blue and when you’re least expecting it. This can cause a variety of problems if you don’t have the money, but, as stated by Forbes, payday loans can be a lifeline in an emergency.

Comfort in the Knowing

Thanks to the Customer Financial Protection Bureau (USA), those considering a payday loan now have protections in place that ensure they will be charged reasonable rates and their details will be kept safe. In times of crisis, peace of mind is all anyone needs.

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