Top Benefits of a Payday Loan
When facing an emergency financial need, one of the best solutions is a payday loan. This loan can cover any unforeseen expenses before your actual payday and save you from penalties due to late payments. As you can glean from the term, a payday loan is paid on your next payday, meaning your debt is only good for a few weeks.
Besides that, there are other significant advantages offered by a payday loan in comparison with a traditional loan.
When you apply for a payday loan, feedback, whether favorable or not, will come almost instantly after you forward your application. You don’t have to fill lengthy forms as you do with the usual loans. In most cases, the funds will be moved to your account either during your date of application or within 24 hours, depending on whether or no you have completed the lender’s requirements. Lenders are always conscious about their speed of transaction because they know it gives them a competitive edge.
When applying for a payday loan, all transactions will be conducted online. You don’t have to talk to a loan officer in person or call the lender several times asking for updates on your application’s status. As long as you are online, you can transact with a payday loan provider whether you’re at the office, at home or wherever. With a traditional lender, you need to personally come for several meetings with your loan officer. One advantage of a payday loan compared to a credit card is that you will receive your credit in cash, allowing you to spend it in any manner you want.
Getting a payday loan is easier because there are only a few basic requirements that you must satisfy. For example, the main requirement is that you have a stable source of income, while traditional loans need you to put in collateral too. Collateral is not needed for a payday loan. As long as you can prove that your income is stable and enough to pay off your loan, you’re good to go. Other typical requirements include registration as a permanent resident in your state and an active checking account. You should also be above 18 years old to apply.
A lot of payday lender limit the amount that you can borrow for the first time. After that, the lender will increase this limit so you can borrow a bigger amount next time, of course depending on your salary and the lender’s policy.
Lower Risk to Credit Rating
Lastly, because of its short repayment period, a payday loan may seem disadvantageous, but the opposite is actually true if you think about protecting your credit rating. Typical loans give you about one to two years to repay the money you borrowed. But who knows what can happen in that stretch of time? You can get sick, lose your source of income and so on and so forth. With a payday loan, you pay the money right on your next payday and that’s it. Clean again.