Top Benefits of a Payday Loan
One of the best ways to meet an urgent financial need 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 the term indicates, a payday loan is payable on your next payday, meaning you will be in debt only for a period of weeks.
Besides that, there are other significant advantages offered by a payday loan in comparison with a traditional loan.
Applying for a payday loan, you will get a response, whether positive or negative, almost instantly after you submit your application. You don’t have to fill lengthy forms as you do with the usual loans. In most cases, you will receive your loan within the day or at least on the following day, depending on whether or not you have complied with all of the lender’s requirements. Lenders strive to maintain a high speed of transaction to remain competitive.
When you apply for a payday loan, all transactions will occur 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. Applying for a traditional loan involves a series of meetings with your loan officer. One important advantage of a payday loan to a credit card is that you can use your credit however you want, because it will come to you in cash.
Fewer, Simpler Requirements
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. A payday loan doesn’t need collateral. Provided you can prove that you have a stable income that can pay off the money you borrow, you’re all good. Other usual requirements are proof of your permanent resident status in your state and an active checking account. The common age requirement is 18.
If you’re a first-time borrower, a payday lender will restrict the amount that you can borrow. After that, your provider will raise this limit, allowing you to borrow more next time around, depending on their policy and your salary.
Lower Risk to Credit Rating
You may dislike the short repayment period that a payday loan comes with, but it’s actually an advantage when you think of safeguarding your credit rating. Typical loans give you about one to two years to repay the money you borrowed. But no one knows what could happen within that period. You can get sick, lose your source of income and so on and so forth. A payday loan is paid right on your next payday, and that will be it. Clean again.