Financial emergencies can arise at any point in time. Many people advocate the importance of saving money. However, in a crunch economy, where people find it difficult to make ends meet on a monthly basis, it’s very difficult to save money. Most families in the UK have to take short-term loans in order to make ends meet. However, loan products offered by banks and other credit lending institutions are generally quite different. Most loan products have specific terms and conditions that you must abide by. Moreover, there are also a handful of requirements that you must meet in order to become eligible for the loan.
Needless to say, taking a loan from a bank is very difficult in the modern world. After the market crash of 2008, most banks and credit lending institutions have created very strict guidelines and requirements that an applicant must meet. Furthermore, the application process is also considerably lengthy, so it takes a few days for an average application to file an application. Even when the application is accepted, it takes a while for the bank to review it and then decide whether you are eligible for the loan or not. Suffice it to say, the bank is not your friend in case of a financial emergency. If you find it difficult to ask your friends or family for money, taking a payday loan might be a great idea. This is a type of short-term loan that has plenty of advantages. Here are a few benefits of taking a payday loan.
Easy to Apply/Qualify
One of the biggest reasons why so many people prefer taking payday loans is because they are so easy to apply and qualify for. You don’t need to meet a lot of requirements. The only stipulations on payday loans are that you should have never defaulted on a loan in the past, and you should be making sufficient income to pay back the loan. The reason why it’s called a payday loan is because it needs to be paid back within a month, i.e. on your next payday.
When you apply for a bank loan, you have to provide a lot of information to the bank or the credit lending institution. You might also have to find a guarantor, which means they will also know about your financial condition. However, when you apply for a cash loan, your banking and personal information remains completely secure. Most payday loan companies generally take very strict measures in order to make sure that client information remains completely secure. You don’t have to worry about leakages at all.
One of the biggest advantages that you get from taking payday loans is that they are processed very quickly. Most payday loan companies have processing times of 24 hours, which means that the money will be credited to your bank account within a day of filing the application.
If you were to apply for a loan from a bank, it takes at least two weeks for the bank to process the application. For people who are suffering from a financial crisis, getting a quick injection of funds is absolutely vital. That’s why payday loans are generally preferred by many people. In fact, there are many payday loan companies that provide online applications. You can attach your documents and file an application online only. The company will process it and let you know whether you are approved for the loan within a day only.
Most families that have limited incomes use payday loans as the end of the month approaches. They take a loan and then pay it back as soon as they get their salary next month. Many companies that offer payday loans generally have their shops and outlets all over the country. Just search for a payday loan provider that’s closest to your residence and visit their shop for more information.
Cycle of Debt
The cycle of debt is quite vicious, and many people fall into it unknowingly. You take a loan that has a payback period of two years. As soon as you pay back the loan, you take another loan and then apply for yet another loan to pay back the previous one. It doesn’t take long for most people to accrue thousands in debt within a space of a few months.
Payday loans prevent this from happening. The payback period is generally small, ranging from one month to a year at most. On top of that, the interest rates are extremely high. Therefore, most people try to pay the loan back as soon as possible. This way, you will never get caught up in the cycle of debt. The structure of payday loans is such that you will only be compelled to apply for a loan when in dire need of money.
Another major reason why so many people apply for payday loans is due to the added convenience. You don’t need to worry about applying for the loan during banking hours or on weekdays. Most companies that offer payday loans have their own websites. Just download the application form, fill it out, attach the required documents and email it to the company. If you don’t feel comfortable mailing your scanned personal documents, you can easily drop the printed form at the company’s local branch.
Paying back the payday loan is also very easy. When the loan is approved, the company will ask you to drop a post-dated cheque at their shop when you go to collect the money. The post-dated cheque will be deposited on the date of maturity. In case you have insufficient funds in your account, the company will give you a three day grace period to pay back the loan at no extra interest.
These are just some of the many benefits of payday loans. If you are stuck in a financial emergency and want a small amount, you should seriously consider applying for a payday loan.