Sometimes, life throws us curve balls. When we can be prepared, we are.
But sometimes things happen that put us in a bind. A flat tire, an unexpected medical need, a broken air conditioner.
Many of us work hard and live paycheck to paycheck. When an emergency happens, many of us need a solution to get over the bump on the road. Payday loans can be the answer.
Let’s take a look at the advantages of taking out a payday loan.
What Are Payday Loans?
Payday loans are small loans. They are a popular type of short-term borrowing. You can borrow a small amount. Usually, you will write a post-dated check for the amount of the loan plus a fee.
The lender will hold your check for a certain amount of time before cashing. The date is usually your next payday. This type of loan I also called a cash advance loan or a check advance loan.
A payday loan gives you money when you need it. The interest rate (in the form of a fee) is usually higher than regular loans, though your goal is to pay it back quickly.
There are advance loan lenders just about everywhere. So, you can get a short-term loan when you need one.
Many borrowers take advantage of cash advance loans because they don’t have credit cards. They may have bad credit or a low income.
Payday Loans are Fast and Convenient
The best advantage payday loans have over other forms of lending is speed. A cash advance loan is fast. When an emergency comes up, you won’t have to wait to receive the money you need.
This makes all the difference in an emergency. When your car breaks down, you can’t afford to wait days or weeks until your next payday. Here’s why it’s so fast.
Simple Application Process
Qualifying for an advanced loan is fairly easy. The main requirement is that you have an income and have not defaulted on this type of loan in the past.
You will need to show proof that you have a job and what your monthly salary is. Because the loan amounts are small, lenders only need to know that you have means to pay the loan back.
Low or No Credit Score
You do not need a good credit score to qualify. If your credit is bad, or you don’t have a credit rating yet, that is ok. You are still eligible to receive a payday loan. Traditional loans require a higher credit score to qualify.
Quick Processing Time
The application process for a cash advance loan takes only minutes. Many payday lenders offer a guarantee that you will receive your money on hour after they approve your application.
This process is very different from traditional types of loans. The approval period for regular loans is longer. With payday loans, there is no wait.
Convenient Operating Hours
Payday lending institutions keep store hours rather than bank hours. They are open longer, so you can apply for a payday loan almost any time. Many stay open into the evening hours so you can stop by after work. This is much more convenient than having to take off work or waiting until your next day off.
Payday lenders also have websites. So you can apply online to speed up the process even more. Many have a live chat feature on their website now to provide you assistance at any hour.
Other Advantages to Cash Advance Loans
In addition to the speed, there are other advantages to cash advance loans over regular loans. Combined, they help you avoid creating more debt.
Short-Term Loan Period
Payday loans are short-term. You pay your loan off when you get your next paycheck. It can be a load off your mind to know you won’t be in debt for months or even years.
These loans are also smaller loans. Your income limits the amount you qualify for. So, your loan is one that you can pay off in the shorter term.
Saves on Late Fees
People apply for cash advance loans because they are having an emergency. They use the money to pay bills. By paying your bills on time, you usually avoid fees.
Late fees and bounced check fees can mount quickly. So can overdraft and credit card fees. All these fees can add to your debt.
In this way, cash advance loans can save you money and stress. You can use the loan to deal with your financial issues and avoid creating new ones.
Protect and Build Your Credit Score
Payday loans can cover your emergency, which can save your credit from taking a hit. By paying your bills on time, you are preventing negative marks on your credit report.
You are also establishing good credit by keeping your accounts current and paying on time. If your bills include a credit card, then keeping those payments up to date builds your credit score.
Fewer Loan Restrictions
Payday loans are flexible. You use the money for anything, unlike a car loan. For a car loan, you make payments to the lender for the car. With a cash advance loan, you decide where the money goes.
This flexibility gives you a little independence. Young people who are just starting out often like this option. It keeps them from having to ask their parents for money when they run short at the end of the month.
Another example is getting a cash withdrawal from your credit card. You may have a high credit limit, but you can’t withdraw all that in cash if an emergency arises.
For example, say you have a $2,000 available credit. But you can only draw $500 in cash. With a cash advance loan, you can get the full amount determined by your income in cash right away.
Ready for That Curve Ball?
Hopefully, you won’t need to take out a loan. But if you do, it’s good to know that payday loans are an option.
If you are interested in a personal loan and would like Bonsai Finance to help you find the right lender, please apply now.