Payday Loans: Pros & Cons to Consider and Make the Right Choice
Payday loans make people debate about this type of credit. On the one hand, it is a convenient and easy way to get a necessary sum of money, on the other hand, you get into debts with high interests. So, it is worth setting the record straight and find out the main advantages and disadvantages of payday loans.
Advantages of Payday Loans
- 24/7 service. You can get money any time a day or night just by sending a request. 24/7 payday loans are a convenient service as you get immediate cash for things which cannot be postponed.
- No credit score check. One of the most important conditions under which common credits are given is a good credit score. It means that you shouldn’t exceed your credit limit and have to pay credit interest on time. People who are unable to pay the minimum balance on the credit card cannot ask for new borrowings. In this case, same day payday loans no credit checks no brokers are of great help. Lenders don’t look at the credit history and you don’t worry.
- No additional collateral. As you know, bank loans require additional collateral. It may be movables and immovables. Firstly, it is rather risky as you can lose your property if don’t pay on time. Secondly, often people just don’t have a car or a house. A payday loan for people who can't get credit because they don’t have anything as collateral is a good chance to cope with financial problems. Payday loan companies offer instant payday loans no credit check with any collateral to people who are unable to meet a claim of banks.
- Small amounts. As a rule, the amount of payday loans is small – up to $1000. Banks provide such amount of money unwillingly. Another incommodity is that you have to wait in a queue to get $100-200. Small payday loans direct lenders online are available irrespectively of your location. All you need is a PC and access to the Internet. When you receive a positive respond, you can cash money from your credit card.
- No collections. When you take credits from banks, you know that your time is limited and you have to give money back as quickly as possible because collections will disturb you and turn your life into a nightmare.
Disadvantages of Fast Cash Loans
- High rate of interest. Don’t think that payday loans companies lend money to unknown people eagerly. Their business is risky. Therefore, the interests are so high. Interesting information to know: according to CFA (Consumer Federation of America), instant loans carry an exorbitant interest rate. It can be up to 430%. Direct loan lenders commonly offer large interest while state banks suggest 7-12%. The difference is obvious and even frightening.
- Automatic withdrawal. If you don’t cover your loan on time, payday loan lenders can present the check directly to the bank. In case of Non-Sufficient Funds checks – checks not honored by the banks due to insufficient funds – your credit history will not be damaged. Nevertheless, the bounced check will be sent to ChexSystems. That’s a bad sign as a borrower will face exceeding difficulties to open another checking or savings account.
- Security issues. You know that payday loan companies conduct their business by virtue of the Internet. It is simple to get payday loans; all you need is to fill out an online application containing the information about social security number and details of his checking account. When a person deals with unknown companies, it might result in exposing the borrower to a possible breach of security.
Summing up, it is worth saying that payday same day loans are a good thing as they save people from getting into bigger troubles. One can argue about benefits and drawbacks of these loans, but he cannot deny that fast money may once become the question of life and death.
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Payday Loans Representative APR 2120% (Variable)
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Please note that payday loans are meant to be used for short term financial emergencies and are not designed to provide long term solutions.