If you have been burdened with a cash crisis or an unexpected expense, such as a medical bill or a car repair bill, you may have thought of resorting to a payday loan. You may charge it to your credit card and pay it back over a period of time. This may be an option if you have a low interest credit card so that you donít pay too much in interest. On the other hand, if you have no or compromised credit score, you may not even qualify for a credit card, or you may have a high interest credit card. If you are among the many borrowers who maxed out their credit cards, perhaps you can borrow from your relatives and friends. But what if this is not an option because your friends carry too much debt as well? One option is to try and get a payday loan.
If you already consider applying for one, you may wander how you can benefit from a payday loan. First of all, you benefit from a fast turnaround. You will most likely be approved for such a loan in just one working day. Even if you applied for a payday loan during the weekend, you will get the funds by Tuesday the latest. You may apply for a loan over the Internet, making the application process even easier. Other ways to apply are by phone and in person, with the process taking 20 minutes or less. Upon approval, the payday loan provider will automatically deposit the money into your bank account.
If you were approved for a payday loan, you may be given the option to prepay it. You will avoid interest payments and possibly late fee charges this way. Moreover, you will qualify for another loan of this kind once you have paid it off. A further benefit is the fact that payday loan providers are discreet, and no one will get to know that you borrowed money. This means that your financial or personal details will not be shared with third parties.
While the advantages are obvious, are there any downsides to applying for a payday loan? For some people, payday loan providers take advantage of persons with low income who are often in financial trouble. Some even go as far as claiming that these companies prey on low-income people. Another argument of opponents is that payday loans are offered with outrageous interest rates. This is a good enough reason to shop around and compare interest rates and fees. One thing to know it that payday loans are extendable, i.e. they are renewable. This is known as rollover. If you do that multiple times, however, your payday loan will turn out very expensive.
Payday loans have their downside as well, but the money you get is at the time you need it, saving you a lot of trouble and stress. While convenience costs money, you may want to build an emergency fund so that the next time you need emergency cash, you have money and peace of mind.