Learning The “Secrets” of Businesses
Five Ways a Payday Loan Is Better than a Traditional Loan
A payday loan is one of the best ways to deal with a financial emergency. This loan can help you pay for unanticipated expenses before you receive your salary, and even save you from the penalties of late payments. As you can glean from the term, a payday loan is paid on your next payday, meaning your debt is only good for a few weeks.
Aside from that, there are other important advantages to a payday loan compared to a typical loan.
When you apply for a payday loan, you will get feedback – positive or negative – almost immediately after filing your application. You don’t have to fill lengthy forms as you do with the usual loans. In most cases, the funds will be moved to your account either during your date of application or within 24 hours, depending on whether or no you have completed the lender’s requirements. Lenders always strive for a high transaction speed because it gives them an advantage over their competitors.
All payday loan transactions are conducted online. You don’t have to set an appointment with a loan officer or keep calling your lender to get an update on your loan application status. Everything is done on the Internet, regardless of your physical location. With a conventional lender, you have to talk to your loan officer personally several times. One advantage of a payday loan to a credit card is that you will get your credit in cash and spend it however you want to.
Obtaining a payday loan is easier as you only have to meet a few basic requirements. For example, the main requirement is that you have a stable source of income, while traditional loans need you to put in collateral too. Collateral is not needed for a payday loan. After proving that your income is stable and enough to pay off the money you borrow, you’re all set. Other usual requirements are proof of your permanent resident status in your state and an active checking account. You should also be above 18 years old to apply.
If you’re a first-time borrower, a payday lender will restrict the amount that you can borrow. After that, you will be able to borrow a bigger amount, depending on the lending policy and of course, your income.
Credit Rating Protection
Lastly, because of its short repayment period, a payday loan may seem disadvantageous, but the opposite is actually true if you think about protecting your credit rating. Typical loans give you about one to two years to repay the money you borrowed. But who knows what can happen in that stretch of time? You can get sick, lose your source of income and so on and so forth. A payday loan is paid right on your next payday, and that will be it. You have been refreshed.
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