Payday loans are loans that you pay back on your next payday. They are also called instant cash loans, cash advance loans, quick cash loans, payroll advance loans, and many other names. These loans are obtainable by going to a shop or by finding a lender online. The cash that you get is really quick cash; you can expect the cash to arrive in your bank account in no more than one hour.
Are they useful?
One word: emergencies. When you need money for emergencies, such as medical care requiring immediate attention, to whom do you turn? Do you get loans from banks or large lending institutions? You don’t, because the process takes too long. You have to submit plenty of documents and you have to undergo interviews. What’s more, you have to submit your credit record to them.
Here’s how they work: You find a lender of these loans and then you submit just a few pieces of information, such as your name, your job, and your bank account number. There are some more, but these three are the most essential. What happens is that you get a loan agreement, and then in less one hour, the amount that you have borrowed will reach your bank account.
In online transactions for these cash advances, the process will take just minutes and you can get the money on the same day or at the next day.
Then when your next payday arrives, the amount borrowed will get debited from your bank account. You don’t have to do a thing. Then everything’s back to normal. You’ve paid for the emergency and at the same time, you don’t have to worry about the loan anymore.
The main use of cash loans through the Internet is the ease of use. They provide money for people who need money – urgently but don’t currently have money because they have spent it all for essential needs. Source-(SimplePayday).
One problem among salary-earners is that they seem to have plenty of money during the few days after they get their earnings, but beyond that, they generally just spend it! Suppose emergencies arrive at those times when money has already been spent? Quick cash is needed.
With regards to borrowing times, online loan lenders are flexible. You can borrow them on any day. If you’ll be getting advances, you can borrow any day at any time of the day. You can pay back at an agreed-upon date, even if it’s not payday.
Another advantage – one that is major – is that your credit record isn’t checked during borrowing time. Even with a bad credit record, you can get a cash advance. That makes such a loan a lifesaver at times.
One Key Disadvantage: Interest Rate
The interest rates charged for short term loans are way higher compared to the rates for regular loans. Usual interest rates are 20-25%. Furthermore, there are many sharks that charge as much as 1000% interest rate! Don’t fall for them; opt for the lenders whose rates are reasonable.
Main things to consider when looking for an online lender
The most important thing before anything else is to know the legitimacy of the lender. An individual can check the credibility of the lending company through the Financial Ombudsman. It’s always wise to check whether the lending company received complaints from the past.
The borrower must know the interest rate of the lending company. It’s a fact that online loans usually give a higher rate than a secured typed loan. It’s definitely important to understand the lender’s rate in order to avoid getting a loan which the borrower can’t pay back later on.
There are also fees that a borrower must pay in the process of his/her application for the loan. These fees may vary depending on the lending company. It would be advisable to surf the web in order to get detailed information with regards to these fees.
There are some cases in which lending companies charged their customers with a higher interest rate than what is said by the law. This is the reason why it’s very vital to know the law with regards to this matter so the borrower can avoid lending companies which might practice this overcharging scheme.
Too Aggressive in Collecting Debts
There are lenders that threaten their clients if their borrowers weren’t able to pay on time. Any customer should not be treated like this, not just because it’s against the law in the UK, but for the reason that it’s certainly a terrible experience to go through. The borrower should always check the history of the lending company. This can lead the borrower to find the best payday lender in his/her state.
It’s always great to have comfort in applying for a loan if you need the cash urgently. There are many lending companies that offer online application to provide ease in getting a loan. There are also now faster deposits in which the borrower can complete the application process in less than an hour. This would provide the borrower the chance to get his/her loan on time.
Terms and Conditions
It’s important to read the terms and conditions of the lender. This would avoid the borrower from getting a loan that he or she can’t repay on time. All the necessary details are in this section so it would be best to spend time reading the terms and conditions of the lending company.
Nevertheless, emergency loans can be a great help to us. However, like any other loans, we should be responsible enough to pay our debts on time. We should also research first about the payday lending company wherein we want to apply for our loan. This will lead us to get the best deal and the most legit lender.