If the term “payday loan” doesn’t ring a bell, here are other names for it – cash advance, short-term loan, payday advance loan, fast cash or fast loan, bad credit loan, etc.
The Consumer Financial Protection Bureau (CFPB) defines Payday Loans as “Short-term loans on a post-dated check with the complete balance, including fees, repaid on your next pay day. If you don’t repay the loan on or before the maturity , the lender can cash the check or electronically withdraw money from your account.”
Online Payday Loan Quickes (one of the most top-rated online lenders) sees Payday Loans as fast and easy cash advance with instant approval online and quick funding within 1 – 2 business days.
What are the pros of Online Payday Loans that make them so tempting?
Here’s why some people address payday loans, despite the frequent negative reviews:
Online Payday Loans are easy to apply for and get
The number one advantage of payday loans is that they’re easy to access. In fact, many online cash advance lenders promise access to cash within 24 hours and an instantaneous lending decision. Most of them are available 24/7 and offer fast and simple online applications.
Unlike traditional lending process with banks, which may take time fulfill and verify, online loan applications can take as little as five minutes.
Simple requirements that almost everyone can meet
Traditional lenders usually require a Social Security number, photo ID, proof of income, a credit check and can verify your ability to repay a loan by doing hard credit checks. Most “fast cash” loan online lenders have fewer requirements and avoid hard inquiries.
Generally, all you will be required to do in order to get a Payday Loan online is to:
- Be a minimum of 18 years of age
- Have a government-issued ID or Social Security number
- Offer a proof of any source of income
- Have an active banking account
- Provide valid contact information
While few eligibility criteria make getting cash faster and more convenient, don’t forget that extra requirements are usually often put in to guarantee more protection to both a lender and a borrower.
Online Payday Loan lenders don’t check your credit
Unlike traditional loans where you would like good credit to be approved, payday loans don’t require a credit check. No hard credit inquiry means that online Payday Loan application won’t affect your credit score.
Online Loans are unsecured with no collateral required
Unlike a car title loan, traditional automobile loan or mortgage, payday loans aren’t secured by personal estate . If you default (don’t pay), the lender can’t seize your property as a consequence.
While not secured, payday lenders often have access to your checking account as a condition of the loan, which may be a different sort of risk.
You can get more information on Online Payday Loans, their pros and cons, study how they work, and even check your rates on https://onlinepaydayloanquickes.com/.
What you should be aware of with Online Payday Loans
The disadvantages of payday loans are the following:
Depending on the state, payday loans have high interest rates that average about 400% APR.
There’re some predatory lenders online
A predatory lender might offer unfair, misleading or unaffordable terms able to trap users into a cycle of debt.
It’s easy to get into even more debt
Each time you extend (rollover) a loan, a payday lender charges additional fees, increasing your out-of-pocket costs for borrowing the cash .
Payday Loans are designed for low-income, minority communities
According to a 2016 report, payday lenders are mostly located in minority communities. And most often, they aim at people with low income.
Online lenders may require access to your checking account
To gain access to a quick cash advance, borrowers are often required to grant the payday loan lender access to their checking account. While making direct deposit and automatic loan payments is pretty common now, this account access works a bit differently.
Payday lenders can sue you for loan default
Just like other lenders, if you fail to pay a payday lender for long enough, they will take you to court and check out to urge a judgment against you for failure to repay a debt. If a judgment is ordered, you’ll face wage garnishment, imprisonment or other consequences.
Payday Loans don’t help you build your credit score
Last but not least, payday loans don’t assist you build credit because they don’t generally report back to the credit bureaus.
If you build good credit, you’ll qualify for higher quality financial products, including personal loans and credit cards with lower interest rates.
Payday loan alternatives if you would like money sooner instead of later
- Review your bills and negotiate with your creditors
- Get some assistance from a non-profit financial organisation
- Get a Payday Alternative Loan
- Get a cosigner on a standard consumer loan
- Apply for Personal Loans or other secured loan type
How to avoid payday loans in future
Here are some strategies you’ll start today to assist avoid predatory loans within the future.
- Plan ahead for emergencies
- Build your credit so you’ll qualify for higher-quality financial products
When you’re pinched for cash, it is often tempting to fill out a five-minute application for instant cash fast and easy payday loan. But the quickest way isn’t always the simplest way, and you’ll find yourself paying for that single “payday” loan for years on. So before visiting the closest Payday Loan store, make certain to require a while to seem over your other options first. Compare online lenders to get the best offers and receive financing that perfectly suits you.