What You Need to Know Before Applying for Payday Loans
Life is full of unforeseeable emergencies, most of which usually require some financial input in order to offset them. Because the emergencies are impossible to predict, it is very likely that you may not be in a position to raise the money that is required in order to deal with the emergency before it gets out of hand. A good example in this case is the death of a loved one whereby you have to raise cash for the funeral. Besides, even if it was not an emergency, if you are on a regular job and earning a monthly salary then you probably know how it feels to run short of cash in the middle of the month with no immediate available source of additional income until the end of the month.
Why People Want Payday Loans?
All of the arguments above are basically just a few of the reasons why people often turn to payday loans to cover their financial expenses. A payday loan, as the name aptly suggests, is a short term loan that is provided by financial institutions for salaried individuals and, in most cases, is supposed to be paid back at the end of the month.
Some Key Features of Payday Loans
Some of the key features of these loans include the following;
- The duration of the loans is usually much shorter compared to other types of loans. These loans are only issued to help in offsetting some financial crisis and, in almost all cases, they are supposed to be paid back on the next pay day or within a maximum of 30 days. However, some the terms may be varied and the duration extended under some special circumstances.
- The amounts that are issued in form of payday loans are usually small. Usually, the values of the loans range from between 500-100 US dollars. Again, this amount too can be varied by the lender.
- As opposed to other types of loans that charge interest based on the length of time for which the cash is borrowed, payday loans have a flat fee attached to them. This means that the amount of money that is paid as interest is fixed over the life of the loan.
Payday Loan Comparison
It is worth indicating here that a payday loan is not the only way through which you can offset an emergency that comes up in the middle of the month. However, it is the best solution for the same and this is because of the following advantages that are associated with it;
- It is instant. This means that the money can be deposited in your account within 24 hours of applying for the same.
- It is easy to apply for; unlike other loans, this type of loan does not involve a lot of paper and form filling and the entire application process can take a few minutes to complete.
- Ease of approval; the approval measures for these loans are not as stringent as those associated with other loans. In fact, even people with poor credit ratings can still get approved for payday loans provided that they are formally employed, have been working for at least 6 months and are over 18 years of age.