When faced with a financial emergency, a payday loan is one of your best options. With this loan, unexpected expenses or late bills can be paid before you receive your next paycheck. It saves you from late-payment penalties. Because a payday loan is paid with your next paycheck, you will only be in debt for a few weeks or even shorter. Aside from that, these loans have five other key advantages compared to other types of credit.
Lenders usually approve applications for payday loans nearly instantly as soon as you provide the needed information. It’s a fairly quick and direct process. You don’t have to fill any lengthy forms as you normally would when taking out conventional loans. It could take a few hours for a lender to move the funds but you can most probably get the funds on the very same day or at least on the next working day. In some cases, this can happen within an hour if everything looks good with your details. Lenders often make it a point to provide speedy services as a way to compete and attract clients.
The entire process of applying for a payday loan takes place online. You don’t have to ask for an appointment with a loan officer or call the lender over and over to ask about your application’s status. You can practically apply from your home or office, at your dentist’s office or a coffee shop or wherever. To get a traditional loan, you need to meet with your loan officer a number of times. One advantage of payday loans over credit cards is that you will receive your credit in the form of cash.
The requirements for getting payday loans are very basic, such as a consistent and provable income, permanent residency, an active checking account, and being 18 years of age. While traditional loans may require collateral, payday loans never. As long as they can establish that you will be able to pay the borrowed amount, they will give it to you.
Qualifying for a Bigger Amount
A lot of payday lenders restrict the loan amount that you can get as a new borrower. Usually, you will only be approved for a sum that is right within your salary range as well as the lender’s. However, once you have paid off your first payday loan on time, your lender may increase your limit, depending on what your state laws allow.
Maintaining a Good Credit Limit
An installment loan usually gives you one or two years to repay, but the problem is, anything can happen within that period. You could get sick or you lose your job and so on. Payday loans’ short repayment period may seem like a disadvantage, but it can actually protect your credit rating.