You should have heard about payday loans by now. These are the loans that are available now from online lenders. A lot of people are turning to them now in order to resolve their financial problems, but before you do something like that, you should know about the pros and cons of this financial product.
The Bright and Dark Side of Payday Loans
As with any product in the financial world, there is a good and a bad side to payday loans. It helps for you to know about both these sides so you can weigh whether it would be worth using it or not.
The Bright Side of Payday Loans
There are so many good points to using a payday loan and that is why a lot of people are turning to it now. One of those is the lack of credit check. A credit check is usually required for other types of loans. That is how lenders assess if a borrower would be a high risk one or not. Payday lenders don’t need because all they need to know is whether a borrower is employed or not.
Another good thing about payday loans is that they can be processed quickly. The standard now is for a loan application to be approved within the same day. That kind of fast processing is something that you are not going to see when it comes to other financial products that are available.
Another thing in favour of payday loans is the fact that one can file for an application for it through the internet. All you have to do is to visit the site of the online lender and you can send off your application through there. All that you need to apply for a payday loan is a regular employment and a bank account.
The Dark Side of Payday Loans
The downside of a payday loan is that it has a very high interest. It is higher when compared with other financial products that are available. This high interest would make it very difficult to make payments for this loan when you have to.
The biggest problem with it though is that it could put a borrower in danger of falling into a debt trap. That means a borrower would have to keep on resorting to loans in order to meet all of their cash needs and that can be a dangerous situation to be in.
Are you in need of cash really fast? Do you want to borrow money but you’re worried about your bad credit? For both of these scenarios a payday loan is probably the best solution that is available. Let’s take a closer look at this kind of loan and see what it has to offer. Here’s where a lender like primachoice.com.au can help.
Fastest Processing Available
When you need cash quickly, you ought to turn to payday loans because of all the loans that are available today, this is the kind that has the fastest processing time. It is standard now for these loans to be processed within the same day that you would apply for it. When you go to a bank to apply for a loan, you would be lucky to have it processed within a few days.
The secret to the speedy processing of payday loans is the fact that the application for it is done online. All that you need to do is to visit the website of the lender and file for an application there. That way no time is wasted in you going personally to the lender’s office. Also there is no need to submit a great deal of documents. You just have to provide them certain information which they can verify on their own.
No Credit Check Needed
The most common reason why people fail to secure loans is because of bad credit, but with payday loans, you do not have to worry about that anymore. They don’t need to go through your credit history. All that they need is to check your employment. They only need to make sure that you would have the ability to pay them back the money that they would be lending to you. That is the only thing that they want to be sure of.
Using 1 Month Cash Loans Australia 3 Month Payday Loans
But you still need to be careful when you are using payday loans. There is a great deal of risk involved in using this financial product. The risk lies in the fact that the interest that you will be charged for it is very high. In fact it is a lot higher than other loans currently available. The lenders justify that by claiming they are also running a great deal of risk by lending money to someone with bad credit. The high interest might make it difficult to pay back the amount that you borrowed so you have to be cautious in using it.
One of the biggest problems with having bad credit is that it prevents one from getting loans and other financial products. Bad credit would immediately mark as high risk. That’s why a lot of those who are aware that they have bad credit do not even bother to apply for a loan. They know that they would not be getting an approval anyway.
Bad Credit Payday Loans
This is where payday loans can play a very crucial role. These loans are designed for people who are having a hard time because of their credit. The lenders would not be running any credit check on the borrowers. They would be asking for some information and they have their own means of qualifying a borrower for eligibility for a loan. Because of the lack of credit check, this kind of loan is gaining huge popularity today.
Fast Processing for a Loan
Aside from the absence of a credit check, there are also other things that you can get from these loans. One of those things is the speed by which this loan can be processed. The standard now is for a loan to be processed by the payday lenders within the same day that an application for a loan is filed. That kind of processing is something that you would not see on traditional lenders because when you would be borrowing from banks it would usually take weeks to process.
Part of the secret why payday loans are fast is based on the fact that they are processed through the internet. The lenders accept applications for the loans through their websites. So there would be no need for the borrower to physically go to the office of the lender or to submit documents there. All that is needed is for him to provide the necessary information.
Risks of Payday Loans
While these loans might seem like ideal for certain situations, there are some problems with this sort of financial product. Like others, there is a risk connected with it. The main risk lies in the fact that the interest for payday loans can be quite high. Some borrowers encounter difficulties when the time comes for paying back. If you think that you might have a hard time in paying back an amount that you want to borrow, then you should consider other options for getting your money.
Payday loans are designed to help keep borrowers financially stable while they are still waiting for their pay to come in. Everyone has had that experience of not having enough money to last until the next payday. It’s hard to know that you have money waiting for you but it wouldn’t be there on time. There might be something that you want to buy or get. The best way to enjoy finances until your upcoming salary is to get a payday loan.
What’s in a Payday Loan?
What’s in this financial product anyway? There are a couple of things that you should know about it. First of all, this type of loan is taken against your salary. That means you would be borrowing based on what you are getting from your pay check. So in essence you are just getting your money in advance. That’s why it is also called a cash advance loan.
The lenders of this kind of loan are mostly available online. They process the application through their websites. All that you have to do is to provide some information that they will be asking for. You do not have to submit any documents. You would not even be required to fax in copies of any paperwork. But perhaps the biggest attraction of payday loans for some people is the fact that it requires no credit check.
Credit checks are perhaps the most common reason why people find it hard to borrow and get personal loans. That is not the case when you are getting a payday loan however. Lenders of this financial product agree to take on the risk of lending to people with bad credit. So it is very easy to qualify. The most that you would need is a regular job in order to get an approval.
What to Watch Out for
What do you have to watch out for when it comes to using payday loans? The problem with it is that the interest that you might get charged for is quite high. That is in exchange for the easy way that you can get it. So if you are planning on getting this type of loan, maybe you should think twice. While it might give you the cash that you need for the moment, it might cause you more problems in the long run. You might even be forced to keep on borrowing to keep up with your expenses.