Payday loans refer to unsecured loans which are usually less than 100 pounds. These loans are taken for a short period of time, and as their name suggests, they are to be returned on the next payday. Many experts believe though, that payday loans can cause an average man to go into debt and lose a lot of money.
These loans however have the ability to help you out and are a great option for the low end consumers. Here, we explain how payday loans operate and then describe the benefits that an average man can get with their use.
Understanding Payday Loans
Payday loans are often termed as cash advances and they should also be treated as such. With high APR (Annual Percentage Rate) applying on this loan product, it is always better to return them as soon as possible. Payday loans are usually given based on the employment details of an individual. These days, there are also many online payday loans facilities. People can apply for these loans by showing that they have the capacity to return the loan with their normal income.
Payday loans were deemed dangerous just a decade ago in the UK. It was due to the fact that loan sharks could charge unbridled interest rates on these loans, which meant that normal consumers would often fall into great debt. These problems have certainly reduced with the passage of time, and now these loans successfully cater to the low end market of loan consumers. The new government policies also ensure that payday loans are now safe to use, with the maximum interest charges capped at 100% of the original amount in the UK.
Benefits of Payday Loans
There are several benefits of payday loans, especially for people who do not have a great credit history. Here, we describe in detail the several advantages that can be procured, if you are willing to carefully take a payday loan:
1. Convenient Loan
Payday loans are usually much more convenient, because they are easily available even late in the night. They are also processed on the same day and you can usually get the money within a few hours of applying for the loan.
Most payday lenders also offer customer support round the clock to ensure that they are able to communicate with their consumers all the time. The same support resources also come in handy, when you are looking to pay off your previous loan.
2. Easy to Get
Payday loans are easy to get. The qualifications that are required to get these loans are much lower than the ones required for taking the more serious loans such as a personal secure loan. You do not need to get your credit score checked for this loan and therefore, you can benefit from it due to the ease with which you can get this loan.
All you need to do is show that you are an employed person and regularly receiving your salary. As the amount of money which is given as a payday loan is quite low, banks and other lenders feel that their investment is quite secure.
3. Fast Application
One of the main benefits of getting a payday loan is that they can easily be procured within a few hours. If you decide right now that you require a few pounds for a particular need, then you can simply apply instantly for the loan.
It is easy to apply for a payday loan online, and you can get the loan on the same day. Many lenders, in fact, transfer you the amount within one hour of your application. This quick process ensures that you do not have to wait for days, such as when getting a credit card.
4. Flexible Loan
The payday loans are quite flexible. The interesting thing with these loans, is that you do not even have to mention the purpose of the loan to your lender. This makes payday loans ideal for spending on your private needs, when you would like to keep your spending a secret.
They are not like secure loans, where you are bound to buy a car or a house with the money. You can spend your payday loan on anything you like. There are many people who use these loans to pay their rent on time, while others who use it get grocery and supplies before their payday.
5. Hard Cash
A payday loan provides you hard cash, which you can use at any place. It is completely different from a credit card, where you are especially charged when drawing out cash. The payday loan is therefore perfect for use, when you have to pay in places which only accept cash. So, the benefit of a payday loan is that you are immediately able to use it once you get the cash or the amount directly into your account.
6. No Credit History
All people go through difficult circumstances. Unfortunately, such circumstances can often result in generating a bad credit history. This stops you from getting a credit card, or applying for other types of loan. The benefit of payday loans is that it does not depend on your poor credit history. In fact, you can improve your credit score in the future if you use payday loans properly and are able to pay them back within the normally designated window.
7. Speedy Loan
You cannot match the speed of these loans with any other product. Whether you need money for transportation or are simply looking to pay your rent on time, payday loans are swift enough to provide you the much needed relief. This is one of the chief benefits of these short term loans.
These are some of the important advantages of payday loans. There are many avenues that offer payday loans these days, and you need to ensure that you are able to compare them first. QuiddiCompare is perfect for this purpose and allows you find the best possible deal for your payday loan needs.