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 the term indicates, a payday loan is payable on your next payday, meaning you will be in debt only for a period of weeks.
Aside from that, there are other important advantages to a payday loan compared to a typical loan.
Applying for a payday loan, you will get a response, whether positive or negative, almost instantly after you submit your application. You need fill extensive forms as conventional loans require. 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.
When you apply for a payday loan, all transactions will occur online. You need not see a loan officer in person or keep inquiring about the status of your application. Everything is done on the Internet, regardless of your physical location. Applying for a traditional loan involves a series of meetings with your loan officer. One important advantage of a payday loan to a credit card is that you can use your credit however you want, because it will come to you in cash.
Fewer, Simpler Requirements
Getting a payday loan is easier because there are only a few basic requirements that you must satisfy. For instance, the most important requirement is that you have enough reliable income, while traditions loans often need collateral as well. Payday loans don’t need you to provide collateral. As long as you can prove that your income is stable and enough to pay off your loan, you’re good to go. Other typical requirements include registration as a permanent resident in your state and an active checking account. The common age requirement is 18.
Most payday lenders put a limit to how much you can borrow as a first-timer. After that, you will be able to borrow a bigger amount, depending on the lending policy and of course, your income.
Lower Risk to Credit Rating
You may not like the fact that payday loans come with a short repayment period, but this can actually be an advantage, considering that this helps protect your credit rating. If you apply for a regular loan, you have around one to two years to pay it off. But anything can happen within that time. You may fall ill, lose your income source, and so on. You pay a payday loan right on your next payday, and that’s about it. Clean again.