Whether you found yourself in the middle of an emergency situation that requires you to spend some money or if you simply need to make ends meet until you receive your next paycheck, one of the things that you could choose to apply for is an instant online payday loan.
However, if you’ve never applied for such an advancement before, you might want to know more about the pros and cons of applying for these loans. Fortunately for all individuals that are wondering the same thing, we’ve prepared a list of 8 pros and cons of using these online payday loans, but let’s first look at what it is:
Instant Online Payday Loans: Explained
Before we take a look at all the pros and cons you might come across, it’s important that we mention what they are, which is especially useful if you’ve never applied for it before. To put it simply, these loans are short-term and unsecured, which means that you won’t have to use your assets – such as your house or car – as collateral if you’re unable to pay off the amount. They are offered to individuals based on their salaries, credit history, and, of course, employment status.
Now, you should know, they’re unsecured, which is why they’re considered to be high risk for the lender, thus, they’re low-value, meaning that you might not be able to get more than 1.000 dollars. When it comes to the repayment requirements, the lender will most likely require you to return the amount in the form of a single payment, and as the name implies, you’ll need to return it when your next paycheck arrives.
So, What Are The Pros of These Loans?
1. You Can Secure Them Quickly
One of the first advantages that you’ll come across with this option is that you’ll be able to obtain this short-term credit relatively quickly. What does this mean? Well, this means that, if you’re successful with the application, you could receive the cash by the end of the day. Hence, no matter what you initially needed the funds for, applying for this type of loan with an experienced and reliable lender could be a suitable option for you.
2. Simple Application Process
As we already mentioned, applying for it will be extremely simple. Naturally, you’ll need to submit some personal information, but more importantly, you’ll have to provide the status of your finances, meaning that you need to submit how much you earn. They’ll most likely check your credit rating as well, mostly because this will tell them if you’ve repaid your previous credits on time. If everything checks out, you’ll get approved.
3. A Wide Range of Options to Choose From
There is a wide range of options such as WorldPaydayLoans.com that’ll allow you to secure payday loans. This means that you won’t have to endlessly search for a suitable option, instead, you can simply feel confident about the company you opt for. Keep in mind, you should check all of the rates and terms before applying for any option, and by doing so, you can ensure that you choose the best option for yourself.
4. You Can Obtain it, Even With Bad Credit
A lot of people have problems with their credit history. If you’re one of those individuals, you should know that you can secure a payday advance, even if your credit is bad at the moment. Some lending organization will consider offering your a loan if you provide evidence that you’re currently employed and that you have the means for repaying the amount. Hence, don’t worry, you can obtain it with bad credit as well.
5. They’re Regulated And Monitored
You should know, if you choose to apply with a lending organization that is registered, licensed, and authorizes with the FCA, they must follow all the necessary rules, regulations, as well as lending requirements imposed by them. This suggests that they must ensure that you can actually return the amount and that you can make the payments on time so that they don’t have issues with their organization and regulatory body later on.
So, What Are The Cons of These Loans?
1. The Interest Rates Are Higher
The first disadvantage about these loans is that they are short-term and unsecured, which means that the lender is at risk when it comes to someone repaying it. Thus, the interest rates that will most likely apply to your credit will be higher than some other options available on the market. Hence, when you’re searching for a company that you’ll work with, one of the most important things for you to do is to check the interest rates that they’ll offer.
2. There Are Penalties + Extra Fees
A lot of lending organizations will charge you extra if you fail to return the amount you’ve borrowed on time. This is why it’s extremely crucial that you learn the terms and conditions they offer to borrowers. Additionally, don’t forget to see the fees they have, as well as whether or not you can repay the loan earlier – if you have the funds, of course. Keep in mind the FCA will protect people from building debt by capping the interest rates on these advancements.
3. There Are Time Limits
Last on our list of disadvantages is the fact that, besides the extremely high interest rates on these loans, there are also time limits that can cause a problem for a lot of individuals. Now, some companies will offer you a repayment term of three months, while others will require you to pay within a month. Also, most of them will require you to pay everything at once, which can be an issue for you, thus, do some digging on all terms.
Although there is a wide range of benefits that you can gain from applying for a payday loan, there are also some drawbacks, which is one of the main reasons why you must ensure that you learn all the terms, conditions, and requirements imposed by a lending organization before submitting any of your information.
So, now that you understand both the pros and cons of payday loans, don’t lose time. Instead, determine whether or not this particular option is suitable for your needs, and then start looking for an organization that’ll provide you with the help you need during a time of crisis.