One of the most stressful situations that one can experience is being short of cash and being unable to handle all financial obligations. One feels like they have nowhere to turn to for help and most especially if they don’t have enough time to take on another job or apply for a bank loan. However payday loans are available for to individuals who need cash to meet their financial responsibilities.
What is a payday loan?
A payday loan is an instant short term loan which is provided to individuals whenever they need the cash. However they are given at a high interest rate. The borrower typically writes a postdated personal check and the amount they wish to borrow plus a certain fee in exchange for the money. The lender then holds on to the check and hands it over upon the agreed date which is usually his next payday. Payday loan can also be termed as an advanced loan.
Situations in which one may need a payday loan
1. When one needs cash urgently
Payday loans are quickly processed unlike other forms of loans that take even weeks to be processed. If one needs money fast then payday loan can be the best option.
2. When one have problems with credit card
In most cases, people are faced with bad debt making it hard for them to secure loans from lending institutions. If one is in such a situation and needs cash then he/she can choose to use payday loans.
3. When one needs short term debt
Most people don’t like owing money to lending institutions for a long time. For those who love short term loans payday loan can work for them.
4. When the purposes of the loan cannot be accepted by other lending companies
With payday loans, a loan is approved regardless of the purposes and one doesn’t need to justify his/her expenses. Payday loans are easy to get.
Advantages of payday loans
Speed-One of the biggest advantages of payday loan is that it is quick to get. Unlike when one is using a credit card, one don’t have to apply and wait for the credit card company to determine if one is worthy before approving. With payday loans it is automatically.
Easy to qualify-unlike other forms of borrowing, one do not have to have a good credit card rating to secure a loan. Most payday loan lenders are only interested in knowing if your job pays well for you to be able to pay in your next payday.
Flexibility- payday loans are flexible. One can get the cash and spend it as they wish without any restrictions, unlike other types of loans like mortgage or car loan where you have to spend the cash on the exact purpose.
What to look for when choosing a payday loan lender
Terms and conditions- it’s good to look for their terms and conditions of payments before finalizing the process. One can check on their penalty fees and fine to determine if they want to deal with the company.
Interest rates-payday loans have high interest rates by nature, compared to credit card rates. However, it’s good to compare different payday loan lenders to get the one with favorable interest rates.
How easy it is to contact them-It’s good to ensure that a payday loan company has a published telephone number published on their website. One may be faced with an emergency and may need to contact them.
Credibility-the best way to ensure that the company is genuine, ethical and responsible is going through their client’s reviews.
It is now clear that payday loan can really help people get out a financial bind if they need cash urgently!