19-Feb

10 Benefits of Payday Loan

For many people, it is not always easy to identify payday loan benefits immediately. Designed purely for the short term and with higher interest rates than many forms of borrowing, opting for short-term credit is not always the best solution for everyone.

In fact, it is recommended that these short term loans should only be used for emergencies.

A loan should not be a regular form of borrowing (or indeed income). You should know exactly how, and when, you will be able to pay this money back.

Yet despite these considerations. there are often payday loan advantages that make them very useful for consumers in certain circumstances.

Suitable for people with bad credit

A person with a poor credit history might struggle to borrow money. Most providers of traditional consumer finance options will reject any high-risk applications.

Individuals considered to be high risk might have struggled with debt in the past, though the high-risk category can also include people with no credit history at all.

Payday companies do stringent affordability checks but have compensated for the high level of risk by charging higher levels of interest than other lenders.

As a result, they can often accept loan applications that other types of lender will not.

Easy application process

In the majority of cases, the application process for finance is done entirely online. In exceptional circumstances, further types of evidence may need to be provided.

For most people, applying for a credit involves nothing more than completing an online form with personal and financial details.

These details are secure and will not be passed on to third parties, but they will be used by the lender to make a quick decision.

Easy to manage

Most borrowers choose to manage their borrowing online. This is one of the payday loan benefits that can make them easier to control.

When you make an application for a payday loan, you are typically given access to a personal online account. When you log in, you can see your current loan balance and any repayment dates, as well as having the option to make an online payment.

Managing your loan online makes it easy to make early repayments if you have the money available.

Quick money for emergencies

Emergencies do not wait.

If your car breaks down or the boiler needs replacing, you may not have time to wait for a traditional form of borrowing to be approved.

As well as offering online forms to save you from a trip to a physical store, many lenders can transfer the money to your account within minutes of a successful application.

Pounds to Pocket, for example, advises that most loan decisions are made within 30 minutes, with money sent to the borrower’s bank account within 10 minutes of approval.

You can use the money for anything that you need to use it for

There are currently no restrictions on the use of loans.

That said, it is strongly recommended by everybody in the industry that you only use your short term finance for absolute life essentials and emergencies.

Short-term impact

Some forms of credit can put you into debt for more than 12 months.

Other payday loan benefits are that they are intended to be borrowed over very short periods of time – days or weeks – and will not hang over you for years.

Available at all times

Short term finance is available outside traditional banking hours. The online application process provides the opportunity to borrow money at any time of the day or night.

You can also manage your loan 24/7, making repayments or checking your balance as often as you like.

Controlled by the borrower

When you apply for a form of credit, you choose the amount of money that you borrow and the repayment terms.

You will be provided with clear information about the overall repayment amount, any monthly instalments (if your loan is to last for longer than a month), and of course – your repayment dates.

You can then adjust the amount that you are borrowing, or the length of your loan term, to tailor your financing to your needs.

It is recommended that you borrow exactly the amount that you need. Not borrowing enough can leave you with further expenses elsewhere, which can cause financial difficulty, whilst borrowing too much will likely lead you to pay unnecessary interest on money that you do not need.

If you do borrow more money than you need, most lenders will allow you to repay early without any additional charges.

Summary

Payday loan benefits are numerous:

1 You might find that your application is accepted, even if you have a poor credit history.

2 You can manage your borrowing online, checking your remaining balance or making repayments at your convenience, anytime, day or night.

3 Borrowing options are available relatively quickly, making them suitable for emergencies. You might be able to apply for finance and receive the money the same day, usually within an hour or two.

4 These loans can be spent on anything that you would like to use the money on, though it is recommended that they are only used for emergencies and essentials.

5 Short term credit could (in extreme cases) even save you money. Other forms of borrowing and missed payments, can become more expensive overall and lead to bad credit.

6 Payday borrowing is a short-term form of credit. It will not be hanging over you for years.

7 Borrowing is consumer-controlled. You choose the amount of money that you borrow and the amount of time that you would like to repay your loan over. You will be clearly shown how much you will need to pay in total, along with each instalment amount. You can make an informed decision to borrow money.

If you are in need of quick cash for personal expenses, apply for a fast personal loan with My Cash Online today.



*Disclaimer & Example: For our Small Loans of $2,000 or less, an APR (Annual Percentage Rate) doesn't apply. These loans are fee-based only with a term between 62 and 180 days, and so the APR is 0%. The establishment fee is 20% of the amount borrowed and the monthly fee is 4% of the amount borrowed. Representative example: a loan of $1,000 repaid over 3 months equates to a total amount payable of $1,320 comprised of $1,000 principal (amount borrowed), $200 establishment fee and $120 in monthly fees. The maximum comparison rate on loans between $300 and $2000 is 199.43%.
For our Medium Loans between $2,100 and $5,000, with a term between 2 months and 12 months, the maximum Annual Percentage Rate (APR) is 48% (Comparison rate 65.6597% p.a.) and there is a $400 Establishment Fee. A Medium Loan of $3,000 borrowed over 1 year would equate to a total amount payable of $4,289 (including a $400 establishment fee).

Under the current legislation, most small personal loan providers don’t charge an annual interest rate (you’ll know this as an APR %). The maximum you will be charged is a flat 20% Establishment Fee and a flat 4% Monthly Fee. The maximum comparison rate on loans between $300 and $2000 is 199.43%. This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

© 2022 Owned by Australian Synergy Finance Pty Ltd, ABN 54 613 655 646. Australian Credit Licence 490422. The information on this webpage is general information only and does not take into account your objectives, financial situation or needs.