Understanding the Positives of Payday Loans

Payday loans are an increasingly popular way to borrow money in the short-term, with many people relying on this type of lending to pay off unexpected bills when times are tough.

Before taking a payday loan, check with state laws. Some states have made it illegal to take a payday loan.

This especially rings true if you have a bad credit score. Having a bad credit score might prevent you from accessing a personal loan with one of the big lenders, but it doesn’t affect your chances of securing a payday loan.

With their popularity only growing and new regulations in place, here is the ultimate guide for understanding how payday loans can help you.

Firstly, how Popular are payday loans?

According to Pewtrust, each year, 12 million borrowers spend more than $7 billion on payday loans in the USA. This is a massive number and clearly shows how popular they are. This type of lending can be a lifeline, and if handled with care, is a great financial solution in tough times.

So, let’s take a look at the positives of payday loans…

1: Easy Application

The application process for payday loans is usually fast and simple, and you don’t have to supply masses of details about your life. You will likely receive a decision very quickly, and if you go through a free credit broker, like Cash Lady, you will get a decision in under two minutes. If you are desperate for money, this solution can really benefit you.

2: Better Regulated

New rules have been put in place in the USA by the Customer Financial Protection Bureau to better regulate the short-term loan industry, meaning you can no longer run the risk of accumulating excessive fees and your details will be kept safe. With this peace of mind, why not take out a payday loan if you need it?

3: Fast Money

If approved, money can be in your account in as little as an hour. If you have an emergency and don’t have the cash – perhaps you need urgent repairs, or your car has broken down – a payday loan would definitely be classed as a lifesaver.

 4: Shorter Period  

With a personal loan, you could face years of repayments, and if you only need to borrow a small amount this is far from ideal. This isn’t the case with a payday loan as the repayment period is short, usually under a year, so you won’t be stuck with years of debt. You have more control this way.

5: A Limit to Spending

With a credit card, you can have a very high credit limit, and this isn’t helpful if you are in financial difficulty; it could cause you to fall further into debt. A payday loan, on the other hand, has a limit. You apply for a fixed amount when you need it, which means once the money is gone, it’s gone. You don’t run the risk of spending even more.

To sum up

If you know you can manage the repayments of a payday loan and are happy with the conditions, then why shouldn’t you access one if you need it? Big banks aren’t offering small loans at the moment (the minimum borrow rate is usually $1000), so payday lenders fill a gap in the market and offer customers a lifeline in emergencies.