Choose head or tail in payday loanOn December 3, 2020 by Marshall Appelgren
Normally payday loan is a small dollar loan within two weeks term and it’s a single payment on the next payday. These loans will target only poor or no credit or less financial people. These types of people only need cash immediately for a certain reason. There are some alternatives to a payday loan that people must explore at the end. But first, we discuss the pros and cons of payday loans .
Easy to access – First main advantage of payday loans were easy to access. Because in this loan only cash was access immediately by lenders within 24 hours. This loan application was available 24 hours a day and 7 days a week online. In traditional loans, they take several days to apply and process the loan. But in this loan, it takes just five to ten minutes to complete the full process and gets cash immediately.
Requirements are less than other loans – In some old loans, it requires a security number, the photo I’d, check the credit, proof of income and also check the lender have the ability to repay the loan. Few requirements are needed for fast cash loans not the same traditional loans like personal loans. General requirements to apply for a payday loan was lender must have a government-issued ID, the lender must have at least 18 years of age, they should have proper job or source of income must be regularly and the lender should maintain a proper bank account. These requirements make a lender get cash immediately. Some other additional requirements also needed for the lender to protect ourselves at the time.
A credit check is not a big thing – Lenders need good credit for traditional loans to be approved, it doesn’t require for this loan and they also didn’t want to check the credit history to approve the loan. Credit score can’t be pulled down by them. It means hard credit doesn’t require inquiry. Payday loans also do not increase the credit, the lender must move to the higher financial product in the future.
Unprotected loan – It is not the same as a traditional auto loan, mortgage, car title loan. Personal property will not be secured by a payday loan. For example- if the lender didn’t pay the loan then the property will not be sealed. At-risk time, the lender can access the bank account on a loan condition. Sending or taking lenders to court for some other measures also.
It’s very expensive – payday loans have high-interest rates depends on states and its average rate is about 400%. By comparing charges with other loans like the personal loan is about only 4% to 35% interest. While in credit card, it’s interest range between 12 to 30%. At some moments, a payday loan is a little tough to repay while compared to a traditional loan. Because the lender will not verify your ability that we can repay our loan amount and also they didn’t take any debts from our account before giving a loan.
It’s considered predatory – The term predatory means unfair, unaffordable terms. This payday loan has the ability to trap users simultaneously. It is viewed as a predatory loan because high interest or high cost can escalate quickly.