The Advantages Offered by a Payday Loan
A payday loan is one of the best ways to deal with a financial emergency. This loan can be helpful in covering unexpected expenses just before payday and in avoiding penalties from late payments. As the term indicates, a payday loan is payable on your next payday, meaning you will be in debt only for a period of weeks.
Besides that, there are other significant advantages offered by a payday loan in comparison with a traditional loan.
When you apply for a payday loan, feedback, whether favorable or not, will come almost instantly after you forward your application. You don’t have to fill lengthy forms as you do with the usual loans. In most cases, the funds will be moved to your account either during your date of application or within 24 hours, depending on whether or no you have completed the lender’s requirements. Lenders are always conscious about their speed of transaction because they know it gives them a competitive edge.
When applying for a payday loan, all transactions will be conducted online. You need not see a loan officer in person or keep inquiring about the status of your application. No matter your geographical location, you can transact with a payday loan provider as long as you are online. Applying for a traditional loan involves a series of meetings with your loan officer. One advantage of a payday loan to a credit card is that you will get your credit in cash and spend it however you want to.
Fewer, Simpler Requirements
Obtaining a payday loan is easier as you only have to meet a few basic requirements. For instance, the most important requirement is that you have enough reliable income, while traditions loans often need collateral as well. Collateral is not needed for a payday loan. Provided you can prove that you have a stable income that can pay off the money you borrow, you’re all good. Other usual requirements are proof of your permanent resident status in your state and an active checking account. You also have to be over 18 years old to qualify.
A lot of payday lender limit the amount that you can borrow for the first time. After that, the lender will increase this limit so you can borrow a bigger amount next time, of course depending on your salary and the lender’s policy.
Less Risk to Your Credit Rating
You may dislike the short repayment period that a payday loan comes with, but it’s actually an advantage when you think of safeguarding your credit rating. With a typical loan, you have about one to two years to pay off the cash you loaned. But who knows what can happen in that stretch of time? You could lose your job, you could fall ill, etc. etc. etc. A payday loan is paid right on your next payday, and that will be it. Clean again.