Payday loans often get a bad rap. The truth is, they have high interest rates and a propensity to keep borrowers stuck in payday lending cycles after not being able to pay off their initial loan, only adding to their already heavy burden of debt.
However, Americans still continue to use them, which may have you asking yourself things like, “Are payday loans bad?” and “How do I get a payday loan?” should you ever need one.
In fact, around 12 million Americans take out at least one payday loan every year. So, while they may not be the ideal solution, they are a solution for many Americans each year.
If you want to learn more about payday lending, Bonsai Finance has the information you need.
Whether you’re considering your options because you’re in need of a loan or you simply want to learn more, you’ll find it in this post.
What Is Payday Lending?
If you’ve only heard about payday lending in passing, a payday loan is a fast cash loan a borrower receives by using their paycheck as collateral. Many payday lenders don’t require credit checks from borrowers, so loans are available to just about anyone.
Below, we’ll examine a few of the top reasons why people use payday loans.
Payday Loans Are Easy to Obtain
To put it simply, payday loans are easier to get than many other types of loans.
Borrowers don’t have any complicated requirements to meet, and the process to apply for (and obtain) these loans is really quite simple – with some requests being approved in only a matter of hours.
You Can Use the Funds for Just About Anything
The high-interest loan industry is a $90 billion dollar one, so it makes sense that lenders don’t really govern how the money is used.
Once you’re approved, you can use your loan for just about anything – whether you have an urgent expense before your next payday or simply want to avoid late fees.
Bad Credit Is No Problem with a Payday Loan
If you have poor credit, your bank (if you have one) won’t give you a loan, no matter how badly you need it or how long you’ve been with them. It’s too high-risk for them.
How do they know you’ll be able to pay them back? They don’t, which is why they won’t give out loans in this circumstance.
Financial institutions that offer payday loans don’t often require credit checks, making it easier for people with bad or no credit to get the funds they need.
Payday Loans Aren’t All Bad
While payday loans might not be the best option for those with good credit scores and gainful employment who just need a little short-term help, they are a good option for many people in urgent or dire circumstances.
Contact us today and we’ll help you get the funds you need.
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