A financial crisis can happen to anyone, but not everyone stays prepared for such a situation. People with loose money handling habits face such situations more often and hence look for an alternative to settle their financial crisis until they get enough funds to equate them.
Usually, people prefer a personal loan that makes sense as it is a collateral loan that comes with a quick disbursal process. However, only some qualify for a personal loan, and hence they fail to find the right loan option. Here comes the valid option, i.e., payday loans. A payday loan is nothing more than a short-term loan before pay day. Many lenders lend you money till your next salary is credited to your account.
It looks fascinating to most of you, but before you apply for a payday loan, it’s crucial to know the nitty gritty about these loans. So, without further delay, below are some interesting facts about payday loans that will help you make decisions.
Payday Loans are Short-Term Loans: First, these loans are not similar to usual loans in the finance world. These loans are short-term loans ranging from a few days to a month. Payday loans include repaying the loan as soon as you get your salary. It means you can get this loan for a short period.
You need to Write a Check: Payday loans aren’t collateral-free. It means you need to write a check to procure your payday loan. With the check, the lender ensures you will pay the loan post-salary credit. Getting a payday loan is almost the same for all lenders, including signing a check for safety.
You can Extend the Payday Loan: Usually, this loan is lent till your next salary date. However, there are situations when you will need more time to repay the payday loan. In such a scenario, you can extend the repayment tenure. However, it’s common that extending your repayment tenure will result in a higher interest rate. So, you must take this decision wisely.
Payday Loan Don’t Include Hard Credit Check: One biggest advantage of taking a payday loan is the no hassle of maintaining your credit score. You can choose this loan option even with a bad credit score. Yes, a credit score isn’t considered a qualifying factor for this loan.
However, as it doesn’t involve your credit score, the interest rate is higher than other loan opportunities in the finance market.
Payday Loans are Available Online: Gone are the days when borrowers visit lenders to apply and get the desired loan amount. Today, that practice is replaced with online applications. Numerous online applications are nowadays available with easy loan approval and disbursal process. This has made the entire loan process simple and quick.
Additional TIP: When applying for a payday loan, the biggest you must consider is having a strong reason. With a strong and valid reason, it’s easier to get the loan approved. Most lenders seek borrowers with a valid reason that makes sense and deserves quick loan disbursal.