Read All About Payday Loan Benefits
Many homeowners now owe more to their mortgage companies than their homes are actually worth. So it’s probably no surprise that the online payday loan business is booming.
Many states have enacted strict rules and regulations related to payday loan storefront businesses. Some states have outlawed this type of lending altogether. Using the services of an online payday loan website can help consumers get the cash funds they need without the hassle of going to a payday loan store. This saves time which is an important factor when a person is looking for a cash loan in a hurry.
Are online payday loans more expensive than traditional loans offered by a bank or credit union? Yes, they are. Because payday loans are short-term loans they carry a higher interest rate. They are also meant to be repaid within a very short time period, normally just two weeks or until the next payday. Even with the higher cost of a payday loan, there are distinct advantages to using an online payday loan service.
Common reasons for needing payday loans
Online payday loans are a fast and safe way to get emergency cash funds in a short amount of time. The important word to remember is "emergency". Consumers who understand the risks of payday loans (very quick repayment period) and are confident that they will have the money to fully repay the loan when it is due can greatly benefit from having a reliable source of short-term borrowing. The most common reasons for using an online payday loan website are:
- Emergency medical bills
- Unexpected car repairs
- Shutting off of utility services
- Money needed for groceries and/or gas
- Avoiding late fees, overdraft charges, and bounced check fees
Borrowing money is a serious responsibility. Anyone applying for an online payday loan should consider all the terms and conditions of their loan and be certain that they fully understand what they are agreeing to and signing. When used cautiously, payday loans can give cash-strapped consumers a much needed lifeline to help deal with life’s unexpected financial emergencies.
Advantages of online payday loans
1. Easy applications.
Online payday loan applications are simple and easy to understand. Once an application is submitted, the approval process normally takes just a minute or two. A customer will need to provide personal information such as name, address, telephone number, and social security number along with proof of income.
2. Less than perfect credit is not a problem.
It seems that everyone's credit has taken a hit over the past few years. A person who has a poor credit history, low credit score, or even has taken a bankruptcy is encouraged to apply for an online payday loan. Most lenders will consider your current financial situation rather than your past difficulties.
3. Maintains credit rating.
If a customer is facing numerous overdraft fees, bounced check fees, credit card late fees, or cancellation of a utility service, an online payday loan can be a real lifeline. The average fee for every $100 borrowed is $15. So if a person only needs $100 to avoid hundreds of dollars of bank fees or to keep the utilities working, $115 is not a bad price to pay. Payday loans are not generally listed on credit reports (unless a customer fails to repay the loan)
4. Payday loans are unsecured.
Unlike a car title loan which offers the applicant’s vehicle as collateral, an online payday loan does not require any collateral. The customer’s signature on the payday loan agreement is all that is needed.
5. Fast repayment terms.
Many people might consider this a disadvantage, but in truth, it can be a very positive aspect of payday loans. With this type of short-term loan the borrower knows exactly when the loan is due to repaid and unlike other types of loans, the loan is paid back after two weeks and there are no more future payments to worry about or plan for.
6. Quick access to cash funds.
Once an applicant is approved for an online payday loan, the cash funds can be transferred to the borrower’s checking account usually within one business day. Some companies do offer one-hour transfer times, but there is an additional fee for this expedited service.