5 Benefits of a Payday Loan
A payday loan or advance is a short-term, unsecured loan for a small amount of money. Some people call it a â€ścash advance,â€ť but this term usually applies to money that is withdrawn against a line of credit. Most credit card issuers provide a cash advance service.
Payday loans are not necessarily linked to a borrowerâ€™s actual payday. Most do not require collateral, but they do rely on a borrowerâ€™s employment and payroll records. Because they involve a significant risk to lenders, payday loans have higher interest rates than other types of credit.
For people who need quick cash, payday loans are a good option to consider. They have several advantages over other types of credit. The main benefits of payday loans are speed, availability, convenience, flexibility and immediate cash.
Speed is a major benefit of payday loans. Borrowers can get the cash they need quickly and easily. Whether they walk into a loan store or apply online, they often have their money within an hour. With credit cards, borrowers must apply for credit, wait for approval and then wait for the card to arrive by mail.
Payday loans are widely available, and it is easy to qualify for a loan. An excellent credit history is unnecessary. Most loan operators just want to know if a borrower has a job and salary. A good credit score is required for most credit card approvals, and card issuers also consider the borrowerâ€™s debt-to-income ratio.
Stores for payday loans are easy to deal with. Their operating hours are more convenient than most bank hours. Many are open late in the evening, and some offer telephone, email and live chat support. All of these conveniences make it easy to apply for a loan and make timely repayments.
Flexibility is another benefit of payday loans. Borrowers can spend their payday cash anyway they like, without restrictions. While most credit cards are also flexible, other types of credit â€“ like home mortgage and car loans â€“ restrict how the money is spent.
5. Immediate Cash
Payday loans pay in cold, hard cash that can be spent on anything right away. Credit cards limit the amount of cash a borrower can withdraw against a line of credit. This is the reason most people apply for payday loans.