Advantages And Disadvantages Of Payday Loans

Payday loans are getting famous among people like anything. Over last few years, payday loans and cash advances have become very popular. Instead of their high interest rates and sky-rocketing fees, people do not hesitate to apply for payday loans when they need instant cash. No doubt, payday loans are best when you need cash within a few hours. Payday loan lenders have made things quite easy for borrowers. Now you can fill and submit a loan application over the internet, it will be reviewed within 5 minutes and your loan amount will be sent to your account right away. For instance, you can contact a payday loan lender at www.instantcashadvanceusa.net. It will do every thing electronically without bothering you much. What else you need? The number of pay day loan lenders has increased significantly which is good for borrowers because now the have the option to bargain and negotiate over the rates and charges.

Advantages Of Payday Loans

1.      Payday loan application process is very simple. You can apply online. Almost all the major payday loan lenders now encourage users to apply online. The average application processing time is one hour. Within an hour, you will get a notification about the approval or rejection of your application. In case of approval, your funds will be directly sent to your bank.

2.      The documentation requirement for a payday loan is minimal. You need to prove your identification and source of income. Most of the lenders do not ask for the source of income. So all the process is simple and friendly.

3.      You get the money you need immediately. This is, I supposes, is the best part of payday loans. You do not have to wait for hours. Instead, you will get the money within minimum possible time which can range from 5 minutes to one hour.

4.      Those who do not get loan from any bank and financial institute due to their poor credit score, they can easily get a payday loan. For payday loans, you do not need to have a healthy credit history. In fact, payday loan lenders do not look at your credit score. So pay day loans are best for those who have poor credit history.

5.      Payday loans do not need any collateral. These are unsecured loans. You do not have to show any asset or something to get a loan. As mentioned, you only need to show income proof but that is too, not always needed. Even if you do not have any asset, home, property, car or anything else, you can still get a payday loan.

6.      Payday loans are short-term loans. And are due at your next pay check. This makes them a hassle-free loan type. No need to wait for the due date. Just pay it off when you get the money.

Disadvantages Of Payday Loans

1.      The fees and charges of a pay day loan are very high. It normally ranges from 20 to 30 percent of the total amount. So it means if you get $100 as a payday loan from your lender, you have to pay him more or less $120. Similarly, late payment can result in fairly large penalties. At times, you will have to pay two time or even three times of the principal amount provided you do not repay within due date. Things will get worse if your check bounces. So what you need to do is make sure that you have the resources to repay your payday loan well before due date.

2.      Since pay day loans are short-term loans, so tenure of a loan usually ranges from 10 to 14 days. This creates a lot of issues of the borrowers. It gets hard to arrange a big amount in such a small time especially when you are already short of cash.