Payday loan is a way to raise cash quickly, especially when you are in an emergency. This loan can help you pay off unexpected expenses which can occur before your next salary becomes available, saving you the headache of late payment fees and penalties on your credit cards. There are many advantages to payday loans. Let’s consider them.
Most of the lenders approve payday loans very quickly if all the necessary information is provided. In addition, the application process itself is usually quite straightforward. All you need to do is fill out a form (which might take some hours to process, though). Most lenders transfer the funds within hours if you provide the right details and are approved by their algorithm (which takes your credit score and credit history as primary factors in making the decision). Conventional loans (especially bank loans), on the other hand, can take up to weeks before you can access the money.
All the processes and interactions involved in applying for, and repaying, the payday can easily be conducted online. You don’t need to book an appointment or even call the lender to get cash. You can easily send your application, which can then be accessed via your home or office, or any place with an internet connection. A traditional loan takes a lot of meetings with your loan operation. Another advantage is that there is little paperwork involved, and you don’t even have to send the documents to prove your income.
Fewer Requirements and Prerequisites
Accessing a payday loan requires meetings, but a few basic requirements. The main one is having a stable source of income. Income needs to be consistent as well as verifiable. A traditional income source (such as salary from your employer) can be the right proof which can help you repay the borrowed amount. There are also other requirements which can be activated without checking the account or registration as a permanent resident.
You can Qualify to Borrow a Higher Amount
Many payday lenders are willing to give you as much money as their algorithm can allow, so if you check all the requirements you can get a loan that is higher than what a bank would give you. If it is your first time to access the increased amount, you may not necessarily see any benefits, but your subsequent applications may be viewed more favourably. If you have a history of taking a loan and repaying it, you pose fewer risks to the lenders, and they become more willing to accept you as a borrower the next time (and maybe even give you a slight discount to make sure you don’t go to their competitors).
Protect your Credit Score
The short repayment time period for payday loan is often viewed as a shortcoming, but it also has the advantage of allowing you to protect and even improve your credit score as in many cases you will have repaid the loan before your credit history reflects taking the loan. You can also apply for an instalment loan which you will pay back over a longer time period (up to a year, in most cases). This will be reflected in your credit history, and it may temporarily lower your credit score, but when you successfully repay the load you could well see that your credit score received a boost
All in all, payday loan is an alternative source of income which you can consider under various circumstances. Be smart, and do your homework before applying to any particular lender: this will help ensure that the payday loan you take serves its purpose and doesn’t hurt you in the long run.