A payday loan is one of the easiest and most viable ways to deal with any financial emergency. As it hardly takes a few minutes for its approval and processing, people don’t think twice about availing of it. But they should take a moment to ponder over its pros and cons.
It’s not wise to deal with any money matter without weighing down the benefits and disadvantages it offers. In this post, we bring you a quick comparison of the pros and cons of payday loans.
Payday Loans Online – A Hit or Miss
Payday loans online are infamous credit products designed to help people in times of financial emergencies. It’s a loan that is due for repayment when you receive your next salary. It can be availed of in person or online. People prefer it online because:
It’s convenient
Getting payday loans online via a trusted lending network is super convenient. You don’t have to go to the lender’s location, and you can avail of the loan at any time. Whether you’re in your office or traveling, you can avail of a payday loan.
It’s quick
Online loan processing is very fast. It won’t keep you waiting for days or months for the processing and approval. You apply for the loan, submit the requested details, and that’s it. Within a few seconds, you will receive my approval.
Funds transfer without any delay
When you go for a payday loan at US Installment Loans, the fund transfer is quicker than you think. As there will be a direct bank account link, it will take only a fraction of a second to receive the funds. In some cases, when the loan amount is not too high, funds might get transferred the same day as well.
Repayment flexibility
A payday loan is not stringent and grants you great repayment flexibility. You can pay it back as a lump sum or in installments as well. You can even decide on the repayment period. This flexibility is useful to make sure that the loan doesn’t become a burden for you.
Ability to contact multiple lenders at a time
The online payday loan platforms share one quote with tons of lenders at once. The advanced AI of these platforms matches your borrowing criteria with the lenders’ criteria and proceeds only when the best match is found. This way, you will receive multiple quotes that you can compare and analyze.
Receiving various quotes is a great way to make sure that you don’t settle on less. The best part is that these quotes are non-obligatory, which means you don’t have to accept a quote if you’ve received one. You have all the right to decline a quote without paying any penalty.
Cons of payday loans online
You got to know the pros of payday loans online, and they seemed impressed. However, that’s not the only thing that one must know about payday loans. There are certain cons to this credit product. And, before you decide to go for a payday loan, you must be aware of the cons.
Be ready to pay high interest. Whether you go for an online or an offline payday loan, you’re bound to pay a high-interest rate. The APR of a payday loan can go up to 300%. This is too high. But you can’t escape from it.
You can end up in a loan cycle
The high-interest rate will lead to repayment failure in many cases or force the borrower to take another loan to pay off the debt. This makes you fall into a never-ending debt cycle.
Availing of a payday loan might reveal bank account information
When you apply for a payday loan, you have to write a post-dated check as repayment. This will let the lender access your bank account. If repayment isn’t made, the lender will make attempts to withdraw the money. This is something that no one wants.
Some debt collectors can be very rude
If repayments are not made, some lenders can take the help of debt collectors who might use ruthless debt-collecting tricks like reaching out to you at your workplace, calling your employer, or submitting a check before the salary comes.
These cons can be easily tackled or fixed if you avail of a credit loan from a trusted payday loan provider. Make sure the loan provider you’re selecting adopts an entirely online process, has transparent repayment terms, and provides repayment flexibility.
Make a concise choice
A payday loan is a great way to have emergency funds in your hands. This loan type is suitable when you have an emergency. It’s quick and seamless, but it’s not always a cakewalk. Weigh down both its pros and cons, and then make a wise choice.