Payday loans are short
term loans which are required to be paid back by the next payday. Thus the
tenure of these loans is very short, lasting for just 2-3 weeks. The amount of
loan is small and can range from £500 to £1500. The interest rate for this sort
of loan is on the higher side but since the tenure is very small the actual
interest figure does not amount to much.
Payday cash loans,
because they are so fast and hassle free, are very handy when there is some
sudden expense and there is not enough money to cover temporary but urgent
payments. In fact they are the only help available to the people who have a bad
credit history and have maxed out on their credit cards.
Benefits of payday
loans
Though many people
criticize payday cash loans because of their high interest rates but if one
were to actually analyse the many benefits it offers to the borrowers, one
finds that it is a good alternative financing option especially for those who
despite having a steady job can't get any loans from banks.
Some of these benefits
are:
o Fast and hassle free
processing - approval within minutes and money in the account in 24-48 hours.
o Easy to apply - no
need to run to the bankers, just fill up an online form from the comforts of
home or office and you are on.
o Nil paperwork - no
need to furnish any documents proving your identity etc.
o No credit check done
- all you need is to possess a steady job and a valid checking account and
since no check is done on past credit history, people with bad credit history
can get the loan.
o Easy repay - you
just need to furnish a post dated cheque or arrange for auto-debit from the
bank account to repay the whole amount with interest thus there is no need to
keep the bank account ready each month for the next installment.
o Easy terms - no need
to furnish any sort of security and if you feel unable to repay on time just
ask for an extension which is easily provided against a fee.
Comparison with
personal loan
Though there are two
major differences between personal loans and payday loans - the size of the
loan and the tenure of the loan, if the required amount is small and need is
just short term payday loans score over personal loans on the following points.
Urgency - Getting approval for personal loans is
a long drawn out process with its taking anything between 5 to 15 days. So it
is not a viable option when the need is sudden and now. On the other hand
payday loans take just minutes to get approved. And you can actually have the
money in your account within 24-48 hrs of applying.
Procedural ease - Banks require a lot of documents such
as income proof, identity proof, residence proof etc. from the borrower to
process the loan. Apart from that there is a stringent credit check involved.
On the other hand, there are no documents required for payday loans. You just
need to have a steady job and a checking account.
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