Do you know what payday loan is?

Do you know what payday loan is?

Posted in Finance

Do you know what payday loan is?

Payday loan is the most easy sort of short term credit. Anyone can apply for payday loans, with the minimum procedures. Maximum amount to borrow is $1500, and maximum duration to pay the loan is 62 days. If you have short term financial liabilities, and you don’t have access to banking credit services then payday loans is the best option for you.

 

A payday loan has a lot of benefits, but also has major disadvantages. In the next lines we are going to explain the benefits and disadvantages of payday loans. 

First: This type of quick loan can help you to fast recover your financial situation and pay any due bills easily.

Second: Few documents are required to start you payday loans. All what you need is a social security card, the number of your bank account , yours private driver’s license and evidence of you income per month.

Third: Payday loan is very secure and public. As per surveys in USA, around $50 billion are being traded yearly through payday loans. Which means that, many consumers actually depends on the payday loans for their monthly liabilities.

What are the major disadvantages of payday loans?

First: The main disadvantage is the high interest rate associated with this type of credit. Borrowers will have to pay $22 for each $100 borrowed by quick loans. If borrowers weren’t able to pay the loan in due time, that will lead them to pay additional penalty fees, and even higher interest rate. It means, if you can repay the loan in agreed time, you can expect a real endless financial troubles.

 

2- Comparing between different financial solutions, payday loans have the highest interest rate. So If you have access to banking loans, like mortgages loans, it will be much better for you to select similar services.

 

Finally, we only recommend payday loans for those who are certain from their ability to pay back the loans on the due time.