Life isn’t easy and sometimes large bills and financial difficulties can hit us out of nowhere and not all of us have the money in the bank to deal with these troubles. When this occurs, a payday loan can literally be a lifesaver. A typical payday loan usually offers between £100 and £1500 and you get up to 12 months to pay it back. Other names for a payday loan include a cash advance, a short-term loan, a payday advance loan, a fast cash loan, a bad credit loan, a deferred deposit transaction or a paycheck advance. These loans are designed for people with poor or no credit or poor finances, who need an immediate influx of cash. When used irresponsibly, a payday loan can get you into trouble, but there are many advantages to taking out a payday loan and today, we are going to explore them.
They’re Easily Accessible
The main advantage of payday loans is that they are easily accessible. Most of the time, these cash lenders will make an immediate decision and cash will become available within 24 hours. Some companies promise cash access 24 hours each day, over 7 days a week, and will accept online applications. Unlike a traditional loan, these loans only take a matter of minutes to apply.
No Credit Check
To be considered and approved for a traditional loan, you need to have a good credit score, whereas payday loans do not require any credit history or checks. A hard credit inquiry can be implemented when your credit is pulled, which actually lowers your credit score, but this isn’t something you need to worry about with a payday loan. However, in most cases, payday loans don’t help you build credit.
There are Fewer Requirements
Most traditional lenders will require a lot of your information, a credit check, identification and proof you can repay the loan. Payday loans tend to have fewer requirements and you get accepted faster. You need to be at least 18-years-old, have some form of ID, a regular source of income and an active bank account to be accepted. Fewer requirements increase the convenience of getting cash.
They’re Unsecured Loans
Unlike a mortgage or traditional car loan, a payday loan is not secured by any personal property. If you find yourself in a situation where you can’t make your repayment, the lender has no right to seize any of your property as a consequence of doing so. While they aren’t secured, there are other risks associated with payday loans that you need to be aware of in case you default (do not pay).
Use Them Responsibly
Payday loans exist to help us when we find ourselves in trouble, but you need to make sure you use these loans responsibly to ensure you don’t get yourself into even more debt. It is very common for people to use payday loans irresponsibly, which is why they do receive negative press and why you need to fully understand what you are getting yourself in to. When you do it right, payday loans from companies like LoanPig can be exactly what you need to make it to the end of the month – or even the year if you need the time to pay it back.
Most of us will focus on the negative when it comes to payday loans, but as you can see, there are a lot of positives that surround them. They exist for a reason and when used responsibly, they can work well for us and get us through the financial difficulties that many of us face in today’s society.