Similar to how cash advances work, payday loans are given to borrowers against their upcoming income or paycheck. There is no doubt that it is not too easy to get a loan, particularly because more and more lenders are going online to attract more consumers. Nevertheless, these short term loans should not be thought of as the best and only solution to immediate financial needs. If you are thinking of getting a payday loan, you must first learn about the pros and cons of payday loans.
Advantages of Fast Loans
In Just 24 Hours
- Payday companies allow their borrowers to get as much as $1000 in cash, which they can also get in just 24 hours.
Poor Credit History
- Those who have poor credit history or a previous record of unsettled debts and bankruptcy are still in a position to qualify for the same day loan.
- In order to be qualified for a cash advance loan, the only proof that you need to present is a certificate of employment or proof of regular income that will guarantee your ability to repay the loan on time.
- No matter what you need cash for, whether it is to fund home renovation or to pay for sudden medical expenses, you can get approved for an overnight loan for as long as you have the means to pay it back.
- Same day payday loans with bad credit involve some very simple and easy paperwork and lenders require very few and basic personal details from you such as: your name, home address, as well as the details of your active checking account.
- It does not take too long for your loan application to be assessed and approved. As a matter of fact, it would only take a few minutes up to a day before the money is sent to your bank account.
Disadvantages of Payday Loans
- The amount that can be approved is small. While the maximum amount may greatly vary from one state or country to another, the typical range is from $500 to $1000.
Tight Repayment Deadlines
- It is important that payday borrowers realize that they have the responsibility to pay back their loans on time, because failing to do so could have a severe effect on their credit records.
- The deadline payment time to repay your loan is 14 days. This is because these types of short term loans use the borrower’s paychecks as the payment. If you wish to extend your loan, you will have to pay additional charges and interest.
Cycle of Debt
- Perhaps the biggest disadvantage of no telecheck loans is that they are too easy to get that borrowers are often very tempted to request them. As a result, they fall into the trap or cycle of debt with interest accumulating. This just goes to show how skillful lenders are in luring borrowers so that they can make a lot of profit.