Life is full of surprises and uncertainties. You do not know when an emergency would arise that might require an amount that you do not currently have. If you need money to buy medicine or pay a utility bill, you cannot wait for the next payday. You must have the money now. The question is where to get it instantly.
With the advent of the internet, finding instant cash for your dire needs has become fast and straightforward through what is called a payday loan.
Understanding Payday Loans
For someone new to online lending, it is essential to understand first the kind of credit that you are applying. There are many lenders online, and each of them is different in terms of the period of approval, documents that are needed, the maximum amount that a borrower can borrow, interest rate, payment method, and manner of releasing.
Because the payday loan is considered as a cash advance, you must repay it on your next salary schedule or when your next check is coming. The interest rate is quite high because lenders consider it high risk. The amount you can borrow is minimal, but during a time of crisis, it can be a big help.
Reasons People Opt for a Payday Loan
There are several reasons why this type of borrowing has become popular in many countries.
1. No Credit Rating Required
Most lending companies require borrowers a good credit rating. When you pay your credit without delay, you can get a high credit rating. When you apply to borrow money from an institution, a high credit rating could mean getting more significant amounts and a faster approval. If you have been delinquent in your payments, your credit rating could go down.
With cash advances, the lender would still lend you money despite your bad credit rating. However, you might only receive a small amount at a higher interest rate. Nevertheless, you are allowed to borrow, and if you pay on time, your credit rating can improve. You can also reapply and get approved for bigger loans.
2. Personal Presence Not Necessary
Applying for a cash advance or payday loan is done through the internet. All you have to do is to download an app, complete the form, and submit online. Some lenders would approve your application after a few hours to one or two days. The lender deposits the proceeds into your bank account. You do not have to go to the office of the lender to apply, get your money, or pay. Since you do this online, it becomes highly convenient.
Since there are no co-makers or guarantors required, nobody would know that you borrowed money. You do not even meet the lender or his staff personally. Some people are afraid to borrow from financial institutions because they are embarrassed when other people know about it. With an online cash advance, only you and you alone now know how much you borrowed, how much to pay back, and if you are delayed in paying or not.
4. Use the Money Any Way You Want
Some lending companies ask you how you are going to spend the amount that you borrowed. With a payday loan, you can use the money for whatever purpose you deem necessary. Use it to pay your medical bills, pay your other debts, or even to travel. You decide what to do with it, which differs with different lending companies that allow you only to use it for the purpose that you specified in your application.
5. Set the Payment Schedule
In the application form, you must indicate when and how you shall repay the loan. Make sure to think about this well. Remember that delayed payments have penalties. Make sure that you can pay the amount on the date that you indicated in the application form.
6. Use It to Improve Your Credit Rating
Since a payday loan comes in small amounts, it is one way of improving your credit rating by paying on time until you have paid up in full what you owed plus the interest. Once you get a high credit rating, you can apply for bigger loans from banks and other financial institutions. The proceeds would be enough to buy a car or make a down payment for a house of your own, or to put up your own business.
7. Easy to Access
The fact that even low-income groups can apply for a cash advance has made it one of the easiest to get credit in countries where it exists. Some states, the interest rate is regulated to make sure that people would continue to avail of it.
If you are in a dire situation today, and you need cash immediately, you can download the app and fill the application form. Once you have submitted it, you can get approved within a few hours and see the funds in your bank account in a short while.