Do you need fast access to cash to cover an emergency expense or avoid a bounced check? Are you aware that payday loans can provide a solution? Around 3% of adults in the US use payday loans, statistics show.
What are payday loans? Payday loans are unsecured, short-term loans of small sums of money that provide a cash advance on your next paycheck.
How do payday loans work? The lender verifies your income to determine your payday and your ability to repay the loan. If they approve your application, the lender pays you the money in cash or directly into your bank account. To repay the loan, you either write a postdated check or agree that the lender will deduct the loan plus interest from your account on your next payday.
Read on to learn the five benefits of payday loans to see if they’re right for you.
1. Fast and Easy Application Process
The best payday loans have a quick and easy application process. You don’t need to submit a credit check or provide extensive documentation. Once you complete an application form, you can receive approval within minutes. You can often apply online, or if you prefer to do it in person, search for payday loans near me to find a local storefront.
Payday lenders are often open for longer hours than regular banks, which is ideal if you need to get cash in an emergency.
2. Automatic Transfer
One of the main benefits of payday loans is that as soon as the lender approves your application, they can transfer the money to your bank account directly. This makes payday loans especially useful in an emergency when you need the money before your next payday, for example, if your boiler breaks down or your car needs repairing.
And when it comes time to repay the loan, the lender can deduct the money from your account automatically without any action on your part.
3. Borrow Money Despite Bad Credit
Payday loans are still an option if have a poor credit history or no credit history at all. Lenders often accept applications from high-risk borrowers that traditional banks may reject. The only requirements are that you have enough income to repay the loan and have not defaulted on another payday loan in the past.
4. No Restrictions on Use of Funds
Payday loans are flexible and once you have the money you can use it to pay for anything, unlike traditional loans for specific purposes. It is recommended, however, that you only use the money for emergencies, because payday loans carry high-interest rates.
5. Save Money on Bounced Checks and Fees
If you’re in a situation where you’re about to miss a credit card payment or a check will bounce because you don’t have enough money in your account, a payday loan can help.
The interest you pay on the loan could be lower than the late fee or penalty charges you would incur if you delay paying the bill until payday. In that way, repaying the loan on time and in full would save you money.
You can also use a payday loan to consolidate and refinance existing debt. Check out realpdlhelp.com to see how much you could save.
Consider if Payday Loans Are Right for You
Among the benefits of payday loans are fast access to cash and easy repayments. However, you should also be aware that lenders charge high-interest rates that can make it difficult to get out of debt. Make sure you’ll be able to repay the loan before you commit.
Check out the finance section of the blog for more tips on managing your money.