Most of us know what it feels like to sacrifice to get to the next payday-and to fill that gap we enter the loan on the day of payment. Fast money loan centers appear to be a good idea when times get tough, but it is better to understand what you are getting into before you sign on the dotted line.
A payday loan is a short-term unsecured loan that is intended to cover unexpected or urgent financial needs that are short-lived. These loans are not long-term solutions because the interest rate and fees are exorbitant, greater than other financial solutions. Most bad credit payday loans are offered by non-banking institutions and, therefore, have more lenient requirements. Chances are each person you ask has a different opinion about payday loans. The truth is that; the answer is unique for each situation. The only way to know if it is going to help or hurt you in your situation is to review all the information.
Advantages of payday loans
It is easy to qualify. Unlike traditional loans, payday loans are quick and easy. In most cases, there is no credit check, and there is no excessive paperwork. Payday loans are much easier than traditional loans because the requirements are more relaxed. Generally, they only require that you be over 18 and that you can prove a source of income.
Easy money: The money is usually deposited into your account the same day or the next day, which means that the funds are available to you quickly. In situations where you have an urgent financial need, this can be very beneficial.
Convenient: In most cases, you can apply for a loan from the comfort of your home. Most of the loan companies that have physical offices also have access online, and some lenders are completely online companies without a physical location of the office. Online loans eliminate long lines anxiety and are especially useful if you do not have access to means of transport. Online applications are simple and fast, and approval is immediate.
There is no doubt about it. With simple requirements and quick availability, payday loans are convenient, but convenience comes at a price.
Disadvantages of the loan to the day of payment
Expensive: The most obvious and immediate disadvantage of a loan to the day of payment is the expense. The truth is that the payday loans are aimed at people with few options. If you have bad credit and an urgent need for money, payday loans are often the only solution.
What happens if you cannot pay?
Most payday loans require a revolving check or written approval to withdraw your payment from your bank account. Therefore, it makes sense that the first thing that will happen when you cannot pay is that the company will try to deposit the check or make an automatic withdrawal of funds.
Remember, when you cannot pay, communication is a key. Most lenders do not want to spend a lot of time and money to collect your payment, so there is a lot of motivation on your part to work with you in paying off the debt.