Payday Loans - the Latest Instant Credit System
Payday Loans - What they mean to a Layman
Payday loans or cash advances are short term loans that you can borrow from lending companies in times of financial crisis. You are nearing your next payday at work and your cash reserve is dwindling. You need to meet a few urgent and unavoidable expenses that cannot wait until your payday. You look for several alternatives that may include appeals for help to friends and relatives but unfortunately no help is forthcoming.
Blessing in the form of Payday Loans
There are lending companies that offer payday loans to people like you who cannot meet financial exigencies at certain times. As the name indicates, payday loans are loans given to people who undertake to repay the loan by the next payday. These loans do help people in their trying times, but you need to exercise extra caution while taking such loans.
Eligibility for taking Payday Loans
You will be eligible for a Payday Loan if:
* you are eighteen years and older.
* you have been working in the current job for at least three months.
* You have a running bank account that has had active transactions in the last three months.
* you have a minimum salary of $1000.
Advantages of Payday Loans
* Comes in handy at the right moment when you need funds urgently.
* Instant relief from worry in times of financial crisis.
* Straightforward dealing with a company without having to beg or borrow from a friend or family member.
* They can be repaid on the next payday, so you can heave a sigh
of relief without having to experience the stress of a long term loan.
* No collateral security as they are unsecured loans, so you don't have to worry about pledging your assets.
* You don't have to pay any upfront fees for the payday loan.
* Application can be submitted online.
* Least processing time.
* Requirements are very few as they are short term loans.
* Loan gets credited into your bank account as soon as you complete the loan formalities.
Disadvantages of payday loans
* Very high rate of interest.
* Inability to repay by the next payday will allow extension of the loan but this will attract a very high rate of interest, so the amount you pay as interest may actually surpass the loan amount in the long run.
* Non-payment or delayed payment of the loan will reflect on your credit rating and may pose difficulties when the need for a loan arises in future.
* Only a temporary solution to your financial problems.
The need for taking payday loans arises when you do not have enough cash reserve or if you have been living beyond your means. Of course, there do arise critical times in everyone's life. Taking a cash advance is not bad if you are in a real emergency but you need to make sure that you repay the loan in time so as to avoid increased fees for the extension of the loan.
You should also learn to live within a budget for living life prudently is the way to go. We may conclude that payday loans do lend a helping hand in times of need.
Konstantin Moody - About Author:
Following and covering the ongoing payday loans instant problem in society is undoubtedly fascinating for me as I feel there is a lot of misinformation on the UK payday loans subject matter at the moment.
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