6-Feb

Pros of Payday Loans

Payday loans have gained popularity over the years despite facing backlash and criticism from lawmakers and financial advisers over their strict terms. Some of the factors that make these loans popular are fast processing times that offer a quick solution to financial emergencies.

Payday lenders do not give much thought to the borrower’s credit history and are highly sought after by individuals with poor credit scores and those without an existing credit history. The major point of contention with payday loan providers is the interest rate. Some payday loan providers have taken the cue and created fair loan products to practice responsible lending.

However, critics must remember that the borrowers are not complaining. As with any other loan, it is possible to default. Borrowers understand that loan repayment requires discipline and commitment. Payday loans are quick loans that empower borrowers who may not qualify for loans from big banks to cater to unforeseen expenses such as medical emergencies and automobile repair expenses.

Pros of Payday Loans

Payday loans play a significant role in helping borrowers meet their financial obligations. Part of the reason why they remain popular is the various benefits they provide to their consumers. Here are some advantages of payday loans.

  1. Easy Application Process-Online application means you do not have to go to the Creditor’s office, saving you time and money.
  2. Small amounts-Payday loans are usually small amounts because they are repaid in a single payment from the borrower’s next paycheck.
  3. Don’t Check Credit Scores-All that you require to get a payday loan is a bank account, proof of employment, and identification documents. Unlike regular bank loans, poor credit history is not a concern with payday loans.
  4. Short Repayment Period-Your payday loan is paid off by your net paycheck. This means that the maximum repayment period is one month.
  5. High-Interest Rate-Some payday loan providers charge interests of up to 400 % per annum.
  6. Quick Processing Time-Payday loans are quickly disbursed to your account as soon as they are approved.

Considerations to Make for Instant Payday Loans

If you apply for a payday loan, chances are that you have a poor credit score. This means that big lenders consider giving you a loan as a high-risk event.  While these loans are convenient and easy to acquire, ensure that you can repay the loan on time to get the most value.

Remember that deferred payments will lead to penalties and increase the repayment amount, making it difficult to clear your loan. Payday loan providers are in business and will take necessary measures to ensure their loans are repaid, including taking legal action.

Successful repayment of your loans will build your credit score and keep you in control of your finances. Likewise, defaulting negatively impacts your credit score and may lock you out of all financing options.

As a borrower, take your time to research these loans before applying and avoid taking up loans for non-essential reasons such as parties or vacations. If you put your money into good use, you will not regret taking these short term loans.

 

If you are really in need of quick cash for personal expenses, make an online application 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.