When people stumble upon an unforeseen financial emergency (like a sudden medical problem), most of them discover that they do not have enough bucks to get out of it. So what’s your way out of such a situation? Borrowing from friends or relatives can be an agonizing experience for both parties. Thankfully there is another solution. Have you heard of Payday loan? If you haven’t then just read on to know the details.
What is a payday loan?
A payday loan is a short term and small loan that is supposed to meet the expenses of the borrower till his next pay day. You can get loans ranging from a hundred to a couple of thousand dollars. They can be a “quick fix” and can rescue you from monetary troubles. However they can also push you into debt.
Payday loan is getting increasingly popular. Why?
- This is the fastest loan available. The whole process is simple and you can have access to the cash within 24 hours. This is a great advantage because time can turn out to be a crucial factor in case of an emergency.
- You only need to submit some basic documents like identity proof and bank statement.
- This is an unsecured loan and is guaranteed against your salary. So you won’t lose your assets (like your home) even if you default.
- You can pay your bills in time with the help of a payday loan. Consequently your credit report won’t be affected adversely.
What are the disadvantages of payday loan?
- The interest rates are quite high. In fact, they are something around 25%. That means if you take a $1000 loan then just after thirty days you have to pay back $1250. This can be a daunting task for some people.
- You cannot borrow a huge sum of money. The small amount that you will be granted may not satisfy your requirements.
Are you eligible for a payday loan?
- Payday loan is sanctioned easily. You just need to be employed with a minimum monthly salary of $1000 and have a running bank account to qualify for it. You also must be over 18 years of age.
- Credit checks are not mandatory in case of payday loan. So even a poor credit history can’t stop you from getting a loan.
We live in a highly unpredictable world where financial emergencies can appear out of nowhere. Payday loan can save your neck in such a situation. However, it should be used wisely and with caution. Otherwise it will only enhance your financial troubles instead of giving you any kind of relief.
