A payday loan is a small, short duration loan that is also called a payday advance. In this type of loan the approval and repayment of the loan is related to the payday of a borrower. The individuals who will most likely use payday loans are:
- Young People: More than half of the users of payday loans are aged between 25-44 years. Some are in their twenties and some in their thirties. People who are aged more than 60 years are unlikely to avail payday loans.
- Low Source Of Income: Most of the payday loan users come with incomes that are not more than $40,000. Individuals belonging to this group are likely to apply for payday loans compared to people who have incomes of $50000 or greater.
- Tenants: People who do not have their own homes and stay as tenants by paying rents are more likely to obtain payday loans.
- Disabled: Borrowers are seen to take payday loans against their disability benefits. Disabled people are seen to use it at a much higher rate.
Why Should You Take A Payday Loan?
If you are wondering whether payday loans are good or not, here are some of the reasons to consider.
- Sudden Need: Any unanticipated expense is a part of a person’s life. If there is a need to fulfil some essential expenses and you also cannot wait, then it becomes difficult to make arrangements for any quick fund. Bank loans are difficult to avail and you will also end up paying interests for some months or even years.
- Instant Approved Cash: Once a borrower provides the necessary details, a payday loan gets approved instantly. Most lenders offer a simple and fast process. So you do require to fill up long forms in order to obtain a loan in comparison to other kinds of loans. Thus you can completely rely on a payday loan if you need quick cash for handling any emergency or anything else that appear.
- Easy And Clear Solution: Online loans are there to meet up unexpected requirements when the need is immediate. Payday loans come with no hidden fees, charges or complications. The approved loan amount is transferred to a borrower’s account within 10 minutes to 1 hour.
- Short Term Requirement: Payday loans are short duration loans that are best suited for critical situations. It is not possible to extend a payday loan for months or even years. The minimum and maximum limit is set accordingly so that an individual can repay it at once without any difficulty.
- Appropriate: The entire procedure of applying for a payday loan is conducted online. So there is no requirement of making any appointment with the lender or contacting them nay times for processing the loan. Once the application is sent online along with all the necessary details, you just need to sit back and wait for the approved loan amount to arrive in your bank account. There is also no restriction on what you spend the cash for.
- Simple Application Procedure: It is very simple to apply for these payday loans online than for any other secured loans from the banks. There is no such documentation that needs to be completed or forms to be filled up. Everything is quickened to make sure that there is instant disbursal of the approved amount.
- Few Requirements: There are very less requirements for payday loan application. So you will easily obtain it. You will require a fixed income source. No collateral is needed. You need to be aged more than 18 years to be eligible to apply for payday loan. There is no credit check done. Thus an individual will never need a high or good credit score. Obtaining a payday loan is much easier comparatively than conventional loans.
- High Amount: If you are a new borrower of a payday loan, then there might be a limit on the amount of loan you are eligible to borrow. This limit will be depending on your income range. But after you pay off your first payday loan, your lender might increase the limit of the loan accordingly. So the more you pay off your payday loans in the scheduled time, the higher loan amount will get approved. There are some restrictions on the limits depending on different states but in most cases it is a lender’s decision.
- Credit Rating Improvement: If a person is having a bad credit rating or is eager to maintain a good credit score, then he must look out for a way to repay loans in the scheduled time and create a good repayment history. Get a payday loan and repay it on proper time to have a positive impact on the credit score. The more you will be paying back on time, the more the credit score will increase.
Payday loans have been the quickest, easiest as well as simplest way of obtaining instant money. It is a hassle free procedure to obtain a payday loan compared to others. But it is necessary to carry out a proper research before you get ready to obtain a payday loan.