Short-term loans are convenient for those who are temporarily strapped for cash and need to pay emergency expenses. Depending on where you go and what you choose, you are allotted a certain sum of money to pay back at a specific time. A good example is the three-month payday loan, where you are given money that you have to pay back in three months.
A 3-month payday loan is a deal that can help finance your needs when you need it but before you apply for one, you need to know more about it. Here are the pros and cons of getting this type of loan.
Here are the advantages of getting a three-month payday loan.
No Credit Check
Payday loan lenders have offers that might or might not require a good credit score, despite it being an unsecured loan. Most three-month payday loans do not check the client’s credit score, but they tend to adjust the interest rate, especially if you have a low score. Not needing to check on credit will also mean your application will be easier.
Despite this, it would still be better if you have a decent credit score. This will help with easier negotiations with the lenders and can give you more opportunities to scout for other loans if you need them.
Easy to Avail
Loans such as three-month payday loans are easier to apply for than the traditional loans you can get at the bank. You can get three-month payday loans or any short-term loan from lending companies, both physically and online. You may also have a loan from some credit unions. However, be careful of the lenders you have no prior knowledge of and make sure that they operate legally.
You can get a regular loan for an average of one to ten business days, depending on several factors like the type of loan, where you get the loan, the lender, and your qualifications. For payday loans, you can get approved as fast as fifteen minutes, which can be attributed to the lesser requirements it needs. In other words, it’s a way to get cash quickly when you need it.
Great for Emergencies
What makes payday loans in-demand is that they can be used to fill your financial needs whenever you need them. It can be an emergency option when there are huge payments to be made, and you may not currently have money. Additionally, you will not be unnecessarily stuck with the debt because you will have it paid back soon. This is, of course, the same case with three-month payday loans since you have about 90 days to pay the money back plus interest and other fees.
Even when you can easily avail of a three-month payday loan, think twice before taking the loan. Does the situation need urgent funding? Do you currently have zero funds to pay for it? Be careful when taking the loan; being unprepared can rope you to its disadvantages.
The following are the disadvantages of having a three-month payday loan.
Even if you borrow a certain amount of money that seems payable in three months, what will make it expensive is the fees that the lender will charge you for borrowing money. The interest rate is what can make any short-term loan intimidating. Compared to a traditional loan, the rates are high and can go even higher than the amount of money you borrowed.
It would be best to first consult lenders for the rates you will be charged when you apply. You can also ask them if there will be adjustments done to the fees mid-transaction, such as a price hike or a price drop. Additionally, you also need to make sure that your funding source can pay off the lenders’ interest rate in three months.
You Might be in Debt for the Long Run
Being stuck in a cycle of debt is one of the dangers that might happen when you’re not careful with your loans. Payday loans are unsecured loans, so you don’t need to secure collateral. However, failure to repay the money and paying the interest can greatly affect your credit score and force you to go to another loan to pay off the debt. Having a low credit score will leave you with few options to help you with such a situation.
Despite the harm of this particular consequence, it does not apply to everyone who has applied for a three-month payday loan or any short-term loans on the matter. As long as you are sure you can pay off the loan plus the interest rate, you will be fine.
In a nutshell
Three-month payday loans can be advantageous, as you can use them for short-term financial matters, and you can avail it quickly with only a few requirements and qualifications. Be prepared when taking the loan, or you could be overwhelmed by how expensive it can be, and you might end up harming your finances.
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