Posts Tagged ‘Same day payday loans’

The Advantages And Disadvantages Of Same Day Payday Loans

Same day payday loans look like a very attractive financing option for those who are going through cash crunch and have to meet some urgent financial requirements. They can obtain instant cash using these easy lending programs. But, at the same time, it is also important to note that these easy loans come with serious risk factors that lenders often do not talk about when you sign up for the loan. If you are borrowing a cash advance, you must read the fine prints thoroughly. Make sure that you understand all the terms and conditions thoroughly and that you can afford those terms.

Advantages

In general, when it comes to counting the advantages of same day payday loans, the list is a very long one. But, very few people realize that these so called advantages are actually just attractive features that lenders aggressively advertise about. For example, the lenders do not check credit score of the applicants in order to determine their eligibility for the loans. Even if the applicant has poor or bad credit, it does not disqualify them from these short-term advance programs. The application process is very simple one. You just have to fill out a simple online application form, where you have to provide some basic details, such as your personal information (name, age, and contact info) and employment and checking account details. There is no credit checking at all, no faxing of documents, no complex paperwork, no nothing; no wonder why these loans are so popular.

Disadvantages

The list of the disadvantages of same day payday loans is comparatively very short, but can be seriously damaging to your financial life. Therefore, before you sign up for these loans, make sure you are well aware of the risk factors associated with short-term payday cash advances. To start with, these loans come with extremely high interest rates. Besides that, you are also required to pay hefty amount of additional finance charges. In general, you must expect to repay over $150 for every $100 of loan you borrow for a 14-day period. This is not all, the situation becomes literally horrible when you fail to repay the loan on the set due date. In case of nonpayment of the loan, lenders usually extend the repayment period for another month, which sounds like a thoughtful gesture from the lender, but it is not because you are charged interest for the extended period at the same high rate. Eventually, the overall outstanding balance on your loan increases up to double or even triple of what you had borrowed initially.

Overall, it is not without reasons why 16 states in the United States of America have completely banned all types of payday lending programs, including same day payday loans. Even other states have introduced specific payday loan laws against the predatory nature of these loans. For example, certain maximum limits have been imposed regarding the interest rates, finances charges, and penalty charges. Besides that, many states have also strictly prohibited the provisions of automatic rollovers or renewals. Therefore, if you are still considering borrowing these loans, you should at least make sure that the lenders are abiding by the laws applicable in your state.


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