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We have all seen payday loans advertised on the Internet, heard the commercials on the radio or television, and seen lenders’ offices while driving around town.
You might even know someone who has borrowed cash from guaranteed payday loans institutions in the past, or is currently paying back a loan. No one ever wants to think that a time will come when they may need a payday advance.
However, if an emergency does present itself and you are in need of quick cash, are same day loans really a good idea? Can they actually help you out if you are in a financial bind?
This question is asked by people every day they find themselves in need of fast cash to cover an emergency. With so many financial counselors advising against payday loans and people who talk about their terrible experiences, one must wonder if the myths are really true.
Most people who work in finance advise people to find other options and avoid payday lenders at all costs, but if this is your last option, it is wise to know the advantages and risks involved by payday advances.
How do payday loans work?
Understanding how these short-term loans work is the first step to breaking down any myths you may have heard. If you have never used one before, you might not understand all the details.
Years ago, the word has it that, if people needed quick cash, they had to resort to illegal means and seek out the help of a loan shark. This meant borrowing money from a sketchy person who could charge you whatever they saw fit for interest.
The terms of this loan could change at any time, because some thug with a baseball bat would come break your kneecaps if you did not agree. You could also get hurt for not being able to pay on time. The loan shark would send their lackey to bust up your business, home, or break your fingers for nonpayment.
Many of us do not know whether this is the truth or a myth, and the same thing goes for payday advances. Just as they spoke bad about loan sharks, people now often speak badly about bad credit loans and the lenders that provide them, but have never actually experienced borrowing from one. This is why there are so many myths.
Payday advances are short-term loans that help people out when they are in a financial crisis. They do not require a credit check and are based on your income. This makes them convenient for people with bad credit or no credit history that cannot borrow from traditional lenders. The loans are easy to apply for and only require proof of income and identity.
They come at a higher interest rate than traditional loans, but, used correctly, can be paid back with minimal interest and fees. Most lenders charge between $15-$25 dollars per $100 dollars borrowed, which is much cheaper than your average loan shark that could charge you 100 percent interest for your loan.
Payday Loans Benefits
- No credit check – Payday lenders do not require a credit check in order to approve your loan application.
- Security – Payday lenders do not require information from your financial institution or a social security number to apply, which keeps your personal information secure. This is great in a time where identity theft is high.
- Flexible payments – Payday advances are meant to be short term, but many lenders allow you thirty days to repay the loan. This is helpful if you cannot afford to pay back the full amount with your next paycheck.
- Fairly reasonable interest – While the cost might seem high, it can be a lot cheaper than paying late fees on credit cards or reconnection fees.
Payday loans are not for everyone and should be used wisely, but, if you are in a bind they may really help you out.