The main pros and cons of payday loans

Paydays loans are one of the easiest loans to get. Unlike conventional bank loans, you won’t need any proof of work or credit scores for your loan to get approved.  Originally, payday loans were created for emergency reasons but now almost anyone can qualify for this type of loan.

The benefits

Instant cash out

Payday loans are the fastest way to get an emergency loan.  The application process is easy; most lenders will approve your loan almost immediately given you provide all the necessary information correctly.  The fastest websites take only minutes to process the money and deposit it into your account while the slowest can take you a couple of days.

Minimal requirements

When it comes to payday loan application, the requirements are simple.  Most lenders will only require an identification card, driving licence or any legal document that prove your citizenship and an active bank account where they can deposit the cash. When you meet these requirements, setting up your account is easy. Lenders use this information to follow up on the payment of the loans.

Future benefits

Making your payday loan payments on time can automatically qualify you to get a bigger loan. When you make the payments a couple of days or weeks before the deadline, the lender will qualify you for a larger limit immediately. This process will go on until you reach the maximum available limit. Consistent loan payments will qualify you for a loan you can use for business transactions.

The whole process is simple

Unlike getting unconventional loans, the process of payday loan is created to be quick and simple. You will need a pc or a smart phone for the registration of your account, application of the loan and the loan repayment. You have several payday loan sites to choose from, this means you can find one with the best and most convenient terms for you.

You won’t need to travel for several hours like in conventional loans; you don’t have to be in the physical location for your loan to get an approval. When the loan application is proved, the money is transferred directly into your bank account where you can access it with your debit card.

The disadvantages

The time limit on the loan is short

 Most payday loan lenders set their limit between two weeks to three months. Payday lenders have different terms so it’s up to you to check on that before you take up a loan. If you do not make the payments on the deadline, the interest rates on the loan will begin to increase and won’t stop unstill your clear the loan.

Late payment will affect your credit report

Late payments have some major negative consequences on your credit report. If you are late with the payments, they will reflect on your credit report and lower your points. This will make it difficult for you to apply for conventional loans and other bigger loans.

The interest rates imposed on your payday loans are much higher compared to those of conventional short term loans. Before you sign up with a lender, check out their policy, rates and legal requirements to be safe.

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