These are short-term loans that people borrow whenever they have emergencies. They are processed with a short period of less than 24 hours. Even if these loans may sound very appealing to the borrowers, they are also subject to controversies. For instance, they have destroyed finances of many people, some of whom have become heavily indebted. In addition to this, some borrowers who have misunderstood them have ended up misusing them. To be on the safe side, all the potential customers should understand the disadvantages and advantages associated with payday loans.
Easy to Obtain
With these loans, lenders do not check the borrower’s credit history. Any person who has a stable, regular income is qualified to get this loan provided he or she is eight years and above. Individuals who have access to a savings or checking account are also eligible for payday loans. US citizens who have a driver’s license are also eligible for these loans.
Ideal for Those Guys Who Don’t Have Other Options
Some people are experiencing financial problems, yet they do not have any other option of securing money. Such individuals can use these loans to cover their financial woes as they wait for their next paychecks. If you are one of them, then you should consider this type of financing.
Convenient, Reliable and Fast
These loans are known for providing convenience because borrowers can apply for them online. This has greatly eliminated the hassles of filling out the paperwork, which comes with conventional or traditional loans. The loan is approved shortly after the borrower’s application is submitted to the lender’s website. The borrower can receive money within a few days or hours.
They Are Expensive
These loans are relatively more expensive than the traditional ones. Their interest ranges between 300% and 900%. You will realize how expensive they are once you compare them with the average 12 % that is charged on credit cards. The interest rate charged will keep on climbing higher and higher if you don’t pay them on the agreed date.
Deception by Lenders
Some firms that specialize in these loans are known for being deceptive when disclosing information to their clients. They can also use some misleading marketing materials just to attract more customers. Other payday lenders are known for finding loopholes in contracts or agreements signed by their customers. By so doing, they can end up taking advantage of those borrowers who are unable to defend themselves legally.