Posts Tagged ‘benefits of payday loan’

Payday Advance Loans – No Need For Collateral, Fast Approval Even With Bad Credit

Payday advance loans have become very popular in the last few years. There are many reasons behind it. The lifestyle has significantly changed. People now are more conscious toward raising their standard of living. The inflation rates have reached new heights. The costs of even the basic necessities are skyrocketing, be it education, medical bills, or just car repairs. The world has become highly competitive and it is not very easy to find a well-paid job. The average American lives on credit, as they have hand-to-mouth fixed monthly income. In such a scenario, when financial emergencies occur and the salary day is still a couple of weeks ahead, these short-term lending programs look like a magic box that can provide instant cash without any hassles. These loans do not ask for collaterals and they even do not require the borrowers to have a good credit score. Following are some major features that make these lending programs so attractive.

No Collateral

Payday advance loans are completely unsecured loans. You do not need to put any collateral against the money you borrow. When you put an asset or property as collateral against a loan, you actually put it at risk. In secured loans, the lenders are secure; when they do not receive the payments in time, they have the right to sell those assets or properties (that are put as collateral) to recover the due amount. On the other hand, since there are no collaterals required for these short-term cash advances, there are no such risks of losing your asset or properties. Still, it is very important for you to understand that these loans may work only if you are sure that you can repay the loan on the set due date. The rate of interest the payday lenders charge is often very high that may range from just 10% to 300% per annum. Though you do have an option to renew the loan if you fail to make the repayment on the set due date, opting for such options will only mean pushing yourself into a deep debt trap.

Bad Credit Is Not A Problem

People with bad credit are the worst sufferers when they have to deal with a situation where they have no money in hand and some urgent financial emergencies are to be met. Since payday advance loans do not involve credit checking as part of the application or approval process, people with bad credit can also qualify for it very easily. In conventional loans, people with good credit are usually charged a lower rate as compared to the rate charged to borrowers with bad credit. Nothing of this sort happens in payday lending. It is true that the interest rates are already very high, but lenders charge the same rate from all borrowers regardless of their FICO scores.

Since these loans are given for a very short period of time, there is no question of long-term liability. But, this statement is true only if you repay the loan on the set due date. If you keep renewing the loan every month, requesting to extend the due date again and again, it will soon turn into huge financial burden. Therefore, even though payday advance loans are approved very fast and provide you the money within hours, you must consider all aspects carefully before you go for these loans.


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