Payday loans are often considered by people who need to get some cash as soon as possible. These loans are well-known for their ability to help out in the middle of a financial crisis. In fact, they have become very popular with some people. However, you should understand the facts about these quick no hassle loans before going for them. You need to know the pros as well as the cons of payday cash advances. This will help you take the best decision for your financial future based on the current circumstances you are in.
The Pros of Payday Loans
Payday cash advances certainly have a number of advantages. That is why it has become very popular. In fact, they are so popular that the payday loan industry is known to handle transactions worth billions of dollars annually. Here are some of the benefits of payday cash advantages that you should know about.
- Payday loans can help you get the money you require on the same day that you apply for it. In fact, the average time required to get the money is only 15 minutes.
- You can apply for a payday loan of any amount as long as it does not exceed your salary. Typically, small loans are applied for with the average amount being $350. It is certainly possible to get loans of over $1000 if necessary.
- The money can be paid back to the lender in any way that is convenient to you. You can write a check for the amount due or pay it in cash directly. Electronic transfer is another possibility. If you have already given a postdated check to the lenders, you do not have to do anything except inform them to cash it.
- One of the major advantages of payday cash advances is the absence of extensive credit checks. In fact, payday loan institutions do not check the credit rating at all. This is quite beneficial for people who have a poor credit score.
- Moreover, payday loans do not affect the credit score in any way. This is great when you do not want your credit to be affected. This makes it easier when you want to apply for bigger loans from banks in the future.
- It is possible to get payday cash advances easily these days thanks to the internet. Many lenders operate online allowing you to complete the entire process over the internet without leaving the house. The money will be electronically transferred to your bank account.
The Cons of Payday Loans
While payday cash advantages have tremendous benefits, the fact remains that they are not entirely the perfect loan solution. In fact, if you are not careful, you may end up in a worse financial situation than what you were in previously.
- The annual percentage rates or APRs for payday cash advances tend to be extremely high. In some cases it can cross 1000%. This is a fact that is not easily understandable as the payday lenders tend to quote interest rates based on the duration of their loans. This duration is typically a few weeks.
- The finance charges levied by the lenders also tend to be rather high. These fees have to be paid in addition to the interest.
- Payday cash advances can be a worse financial risk in the long run. It is easy to enter a cycle of debt because of the high interest rates and finance charges. Many people end up taking another loan to payback the first one.
The Application Process for Payday Loans
The application process for getting payday cash advances is pretty easy. This is the process followed by the majority of the institutions providing these quick no hassle loans.
- You have to be at least 18 years old or whatever the minimum legal age is in your area.
- You need to possess an active bank account.
- You have to be employed and the job must be a fulltime one. Lenders do not give money to people with part-time jobs.
- You will be required to provide your employment details along with the information about your income to the lender. The lender will use these details to determine the amount of the loan that you qualify for. You cannot borrow an amount that is greater than what you earn.