Why not choose a payday loan?
Having a loan can be a bit of a daunting prospect. Given the number of different loans that are out there, consumers are often left confused as to which lending option is appropriate for them.
The answer to which depends on how much money you are looking to loan, and when it is that you plan on paying it back. If the sought after amount is relatively small, and you have a guaranteed means of paying it back soon, then a payday loan may be a viable option.
What is a payday loan?
Payday loans have suffered from some bad press in recent years, some of which has been justified, but this type of loan does offer a very effective and practical service in the appropriate circumstances. This type of short-term loan is tailor-made for borrowing a small amount of money for a small amount of time.
If you need a couple of hundred pounds for an emergency trip, or need to replace a vital component in your life such as a part for your vehicle and it’s too urgent to wait until payday, then a payday loan would be a great option. With this loan, you can have the cash deposited into your bank account within minutes, and have no problems paying it back when your next payday arrives.
The reason that the reputation of these loans has been dredged through the mud is that if you do not meet the terms of your repayment schedule, you could be subject to extortionate interest rates. This is common with all kinds of short-term loans, including credit cards and store cards as well as authorised bank loans.
The benefits of payday loans
While having money loaned from an organisation such as a bank or building society — companies that are worth billions of pounds — may seem like a simple process, it can actually be quite complicated and take a while to authorise. Most banks will ask for some kind of collateral in the event that you are unable to repay your loan, which can be stressful. Indeed, people don’t feel comfortable giving the bank the authority to come and take their possessions if they miss a loan repayment. Payday loans require no such collateral before a loan is authorised.
Another benefit is that credit checks for payday loans are usually minimal if not at all, meaning you can lend money in the short term without having to sweat over a low credit score. This is great for those who are already being unfairly punished for their low credit score and have no other means of securing money in the short term, as they have been rejected by everyone else.
In conclusion, payday loans are an excellent short-term lending option for those who need cash in a pinch, but have an honest and foreseeable means of paying the loan back in the near future.