Specific Advantages of Payday Loans over Typical Loans
If you need cash ASAP, a payday loan is one of the best options you have. It gives you the means to cover any urgent expenses while you still have to get your next salary. As this loan is payable with your coming paycheck, you need not deal with penalties that accompany late payments.
There are many advantages offered by payday loans over more traditional types of loans, but the following are the most important:
Speed of Transaction
If you apply for a conventional loan, it will take longer for you to get your loan. Normally, you will need to wait a few weeks to receive the funds, which isn’t good if you need the money immediately. Additionally, there is no assurance that you will be given the loan. After you submit your application for a payday loan, you will usually be informed within an hour whether it has been approved or not. Some lenders will even give you feedback right then and there. In case your application is declined, you can immediately explore other options.
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Payday loans are generally processed on the Internet. You need not book an appointment with a loan officer, and it’s unnecessary to keep calling them just to be informed about your application’s status. Just send your application online and wait for them to respond.
Among the reasons payday loans are approved fast is that the requirements are rather few. Mainly, you just need to show that you have a stable and verifiable source of income. On the other hand, you may have to provide a collateral to get a traditional loan. Certainly, this is not necessary for payday loans. Just prove to the lender that you can repay the money you want to borrow, and they will let you. There could be other requirements, but nothing more difficult to meet than having an active checking account or proving that you are a permanent resident in your state.
As a new applicant, the amount of money you can borrow will be limited, but this can grow bigger on your future applications as long as consistently make on-time payments. Sometimes, for your second loan, your loan limit can increase by a 100% from your first.
Credit Card Protection
Finally, you may think a payday loan’s short repayment period is a disadvantage, but it is actually a good thing because it helps you protect your credit rating. You are usually given one or two years to repay a traditional loan, and we know that anything can happen within that span of time. You could get sick, lose your job or be in any scenario that makes it extremely difficult, if not impossible, for you to pay your loan off. This is where payday loans make a difference as far as keeping a clean credit record is concerned.