A payday loan is a small amount of money that is lent on a short-term basis but at a much higher interest based on the agreement that it will be repaid during the next paycheck. The lender normally looks at the borrower’s income and credit profile to assess the amount of loan to offer. These are what many people normally refer to as check and cash advance loans as the principal is typically a part of the borrowers next cheque. This is normally an ideal method of raising quick cash to handle financial emergencies such as unexpected or late bills before your paid. It is a perfect way to avoid the penalties imposed on late payments and hence many people opt for them. Other benefits of payday loans are as listed below:
1. Protecting Credit score/rating
Many people have faced the wrath of bad credit rating and this has affected their financial stability in the long run. This is mainly due to late repayments and therefore, the short repayment periods for the payday loans are therefore an ideal way of taking advantage to raise and protect your credit score. Defaulting on the loans will incur fines and penalties that will increase the loan costs as well as worsening the credit rating.
Some emergencies cannot wait. With the necessary information at hand, most lenders will approve your application instantly and the application process is very easy and fast. As in the case of traditional loans, payday loans do not require you to fill in those lengthy forms with all those personal details. With the many competing service providers in this industry, the speed and efficiency of these loans has increased tremendously and most loans are normally processed within an hour to one day. Another advantage is that you will receive feedback almost instantly compared to other traditional loans which take weeks to receive the feedback on your application status. If the application fails, you can always look for an option immediately. The Speedy Cash website is a useful source of information if you require additional insights.
3. Fewer requirements
Payday loans have few and basic requirements compared to other types. Basically, as long as you have a verifiable and steady income source, you’re almost guaranteed to be approved for a payday loan. Most traditional loans normally require collateral, guarantors and other tedious requirements. Another basic requirement is the 18 age limit and a good credit score.
4. You can qualify for a higher amount
As a new borrower, lenders will limit your amount and you can only qualify for the amount within your pay and lender’s range. As you continue paying for your loans in time, then the lender will increase the subsequent applications. This also creates a good relationship with the lenders and this means you’ll always have a quick and convenient solution to your financial emergencies.