It's not so unusual to find yourself in a financial dilemma, particularly these days. When it happens, not everyone has the luxury of turning to close family or friends and asking for assistance. If you have a job with steady income, obtaining a loan can help you sail through those rough times. While payday loans are generally advised as a last resort, they really do have tremendous benefits over the other options. Here are six reasons why payday loans are advantageous and why you should consider them.
Easy Application Process
Those who have applied for a personal loan from a bank or other institution know the mountain of paperwork involved. Applicants should be prepared to submit proof of identification, utility bills or other documents that prove your address, tax returns and W-2s, and bank statements. Beyond that, expect to fill out forms that ask about your employer, work history, previous addresses, outstanding debts, current monthly bills, and even your mother's maiden name.
When applying for a payday loan, you only need to submit a few documents. Most places need proof that you're 18 years of age and evidence of your income. That's it. And you don't even need to leave your house as there are many places to apply online.
The whole purpose of a payday loan is to get money now because you can't wait until you get paid. So approval would need to be fast or it wouldn't serve its purpose. Most loans that are made through banking institutions can take weeks to get approved. But with a payday loan, approval is usually given within minutes, and you can have your cash the same day. Most places will deposit the money directly into your bank account as well, making the whole process extremely efficient.
It seems as though restrictions apply to everything these days. But rest assured, unlike a lot of other places that will ask what you plan to do with the money before they will even process your application, you won't need to offer any such explanation for a payday loan. Whether you need it for car repairs or emergency medical expenses, it doesn't matter.
No Prepayment Penalties
Suppose you get a personal loan, and you want to pay it off early. It should be no problem, right? But sometimes it is. You see, the banking institutions count on you to make payments for an extended period of time, usually over several years. In the meantime, they're charging interest on that loan.
If you pay early, they lose out on all that interest they would have made with your payments. So they make up for it by charging a prepayment penalty or exit fee.
Payday loans are specifically designed to be short-term loans, meaning you're expected to pay them back fast. Most lending centers ask you to pay the loan off with your next paycheck, which generally comes 2-4 weeks later for most people. In fact, the average length of a loan is two weeks. Therefore, prepayment penalties are not even an issue.
Safe Loan Amounts
According to Nerd Wallet, of all the consumers in America that have credit cards, the average amount of that debt is just under a whopping $16,000 per household. That's a staggering statistic, but it actually comes in third to mortgages and student loan debt. As you probably know, it's easy to get in over your head when it comes to loans.
But this isn't nearly as much of an issue with payday loans. They are calculated based on your income, and the legal maximum amount varies by state with the ranges running from $100-$1,000. So you don't have to worry about getting in over your head.
No Credit Check
If you've ever been turned down for a loan due to bad credit, this is where payday loans will win you over. It's super easy to qualify, as there's no credit check, ever.