Payday loans are designed for people who need immediate cash before their next paycheck. It helps pay unwanted and unexpected expenses. Its main purpose is to provide fast and easy money to take care of little emergencies.
Payday loans have advantages compared to the other types of credits. Outlined below are some of the benefits of a payday loan.
1. Fast Approval
Most payday lenders approve applications almost instantly if you provide the necessary information. Compared to other types of loans, the application process for payday loans is simple and quick. You do not need to fill out any lengthy forms.
Moreover, you can receive the funds on the same day or on the following day. Some may even transfer the funds within hours! If you need easy loans, it would be easy with SiLoans if you need it immediately.
Due to the competition, a large number of lenders were pushed to offer quicker services for the consumer to stay afloat in the market.
Other types of loans like conventional loans and credit cards take a long time to process. You will have to wait for several weeks before you can receive the funds. This will not help if you need immediate funds. Plus, there is no guarantee that your loan will be approved.
If you apply for a payday loan, you can receive feedback immediately. In case the lender declined your application, you can immediately seek help somewhere else.
The process and interactions when applying for a payday loan can be done online and in the comfort of your home or office. There is no need to book an appointment with a loan officer or call the lender to get cash.
If you were to compare a payday loan to a credit card, a payday loan has an advantage as you can get your credit in cash. With credit cards, you can only purchase goods or pay for services using the card.
Most traditional loans are lent to borrowers for a specific purpose. For instance, a car loan is intended only to buy a car, a home mortgage to buy a property or home. In the case of a payday loan, you can use it on anything including paying your rent, electricity bills, or repairing your car.
3. You can Borrow Higher Amount
If you are a new borrower, many payday lenders limit the loan amount you can access. You can only access funds within your salary and lender’s range. However, when you pay your first payday loan on time, your lender may increase the loan amount on your next application.
For example, if you apply for a $500 loan and pay it on time, the lender can increase your limit to $1000 depending on the policy and your salary. Paying your loan on time can help build a good relationship with your lender. When a financial emergency arises, you will have someone to lean on.
The minimum and maximum amount of money the loan provider can lend you depends on the laws in each state. Your lender will inform you during the application process of this matter.
4. Fewer Requirements
In will only need a few basic requirements if you need to get approval for a payday loan. One of the most important requirements is to have a stable source of income. As long as you have a stable and consistent source of income, you are almost guaranteed to find a lender.
Traditional loans may require collateral and other documents. But in a payday loan, collateral is not needed. Your stable income is an assurance for lenders that you can repay the borrowed amount. Other than a stable income, they may require you to have an active checking account and a proof of residence in your state.
A good credit rating is needed if you want to qualify for a traditional bank loan like conventional loans. If you have a bad credit score, chances to be approved for a loan are slim. But not in the case of a payday loan.
Though, lenders may still check your credit score if you apply for a payday loan as they need to assess your current financial situation, but is not really necessary.
They are more interested in your ability to repay the loan. If you can prove that you have a stable source of income like employment or business, they are likely to approve your loan.
Offering fast and easy access to funds, payday loans are a great option, especially during financial emergencies. Though it may offer a lot of advantages, one should be wary of its potential drawbacks. Payday loans have high-interest rates compared to other loans.
With this, make sure to calculate the interest rates and other fees that come with it. Also, make sure that you can afford to pay the loan. Otherwise, it may cause additional burden rather than help you.
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