What Do Payday Lenders Offer?

What Do Payday Lenders Offer?

Jan 6, 2020, 12:00:32 PM Business

There are many lending options out there. The question of what a lender offers is very critical. It is not all about money or being approved. As a rational being, you must ensure that the decision you are going to make will result in the maximum benefit. That is why it is vital to evaluate letters. In many cases, borrowers want cheaper loans. In this case, shopping for interest rates is sensible. But the decision to borrow a certain loan type is not limited to interest rates. In case you are plagued with an emergency, you will want to get cash as fast as possible. It does not matter whether you are going to borrow money online from the lowest payday loan Singapore or you prefer traditional lenders.

All you need is instant cash, and in such conditions, interest rates may not be given much weight. That is why loan types, such as payday continues to gain popularity despite being expensive. In this blog, we are going to look at payday loans in details. Specifically, we want to see what payday lenders offer.

Payday Loans

Payday loans are instant loans that individuals are given primarily to cater for emergencies. The loans are short term are expected to be paid back within the next payday. Since the loan is short term with high-interest rates, most financial experts will advise you against utilizing them. Well, the advice might be sound because you are likely to find it challenging to get out of them. Why? The loan is expected to be paid back in a single instalment. Imagine you have taken a loan of $1000 and has to be paid once! You may not have enough cash to cover your monthly expenses. To fill the deficit, individuals often reapply for the loan. If this happens repeatedly, they get themselves into the vicious circle of debt.

The minimum APR on payday loans has often been 400% but can be as high as 1000%. However, because these are short term loans, you don't have to worry yourself so much about interest rates. These loans can save a lot when plagued with an emergency. It doesn't require much to be approved for payday loans. You only need to have income and perhaps a bank account. We discuss more of this in the subsequent section.

What Lenders Offer

Ideally, lenders subject borrowers to credit checks. A borrower has to prove to the lender that the borrowed amount will be paid back along with interest rates in good time. That is why there is why lenders come up with eligibility requirements. Nonetheless, lenders sometimes compromise of these requirements to attract clients. There are some unique benefits that certain lenders will always offer. So, what do payday lenders offer? Let us see.

No Credit Check

Is it possible to be approved for a loan without a credit check? It happens with payday lenders. They do not pay much attention to your credit compared to other lenders out there. As we stated in the preceding section, you only have to provide proof of income and your bank account. This means that even individuals with bad credit can still be given a loan. The loan is expected to be repaid directly from your account once, and that is why lenders do not emphasize on credit.

Fast Access to Funds

One of the most outstanding benefits of using payday loans is that you can access funds after a short period once your application is approved. You don't have to wait for weeks like in other options. Ideally, filling application forms takes a maximum of 15 minutes, and shortly after that approval status is communicated. The funds can be accessed in the following business day. However, in case the approval has been made early in the day, there are high chances of obtaining funds on the same day. Some lenders make the funds available even within hours of application. This has made payday loans quite attractive. Also, you can apply for the credits any time, provided you have access to the internet. This is vital because emergencies often strike at the least expected moments. 

Lesser Requirements

Traditional lenders have many requirements. Apart from proof of income, you will be required to go through a credit check to determine your creditworthiness. In contrast, payday lenders do not demand a lot. You only need to have attained the age of majority, have proof of income, and Identity Card, and a bank account. This makes access to cash even more convenient.

Unsecured Loans

Payday lenders offer loans that do not require collateral. This implies that in case you default the loan, you cannot lose any of your valuable assets. Nevertheless, the lenders are often granted access to borrowers’ bank accounts which can as well be a risky affair. In case you default, the lenders have the option of forwarding your details to credit agencies and this can significantly detriment your credit.

A Provision to Roll Over

There are cases when something can happen and renders you unable to repay the loan in time. If you talk to payday lenders in advance, the loan can be rolled though at an additional cost. It is good to talk to the lender in advance in case you feel you might not be able to repay in the next payday. However, this option can make the loan very expensive and unaffordable.

The Bottom Line

Payday loans can be very beneficial. Access to funds is fast and easy. However, these loans are always expensive, and instead of helping address your financial problems, they might end up worsening matters. That is why it is advisable to explore other alternatives in case you are in urgent need of cash. Consider payday loans as a last resort, and you will be better off. You can borrow from family members and friends. Still, you can conduct your bank for help in case you are in urgent need for cash. Since the bank has your history, you can quickly get a loan. Even if you want to borrow money, there are still some options to explore, such as crowdfunding.

Published by Samantha Brown

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