Payday loans are short-term, unsecured personal loans issued based on the borrower’s earnings. As a borrower, you can write post-dated checks to repay your total loan amount or have the money deducted from your account on your next payday, usually within a month. Payday loans are meant to help you, the borrower, deal with short-term or emergency needs until you next get paid. This kind of borrowing comes with multiple rewards. Discussed below are six benefits of payday loans.
1. Fast access to funds
Financial emergencies can arise at any time. Without an emergency fund, catering to these sudden expenses that can’t wait can be stressful and challenging. This is where payday loans come in handy. Unlike traditional bank loans, payday loans, including weekend payday loans, are a quick way to access funds.
You can apply for these loans online from anywhere without extensive and complex paperwork. Payday loan requirements are easy to meet, making it easy to access money. Additionally, lenders don’t conduct credit checks, further shortening the loan application process. Once approved, the funds can be disbursed into your account within minutes or a few hours.
2. Payday loans have fewer requirements
Unlike traditional loans, payday loans have few requirements. To qualify for these loans, most payday providers require you to:
- Be at least 18 years old
- Provide valid identification, which can be a driving license or a government-issued ID
- Have an active account
- Provide proof of income
These few requirements make payday loans accessible to many people and a reliable source of fast cash.
3. Suitable for people with bad credit or no credit history
Most people have difficulties getting bank loans because of their poor credit or lack of credit history. Should you be approved for a bank loan with bad credit or no credit history, you’ll be charged high-interest rates, making the loan costlier. In such situations, payday loans can help save the day. If you’re in desperate need of funds to cover a sudden expense, you can quickly get money from a payday lender, even if your credit isn’t great.
4. You can spend the funds as you wish
When applying for a traditional bank loan, you may be required to specify how you’ll spend the money. However, when it comes to payday loans, you can use the cash on any financial need. Most borrowers spend payday loans on unexpected expenses, like:
- Medical emergencies
- Home repairs
- Unexpected travel
- Car repairs
- Vacation
- Recurring monthly expenses such as rent and utilities
5. Payday loans are unsecured
Payday loans are an unsecured form of borrowing, and you don’t need collateral to qualify. The fact that these loans don’t require any security makes them attractive to those who don’t have assets they can use as collateral. With an unsecured loan such as a payday loan, there is no risk of losing a valuable asset like your home or car in case you cannot repay the money due to unforeseen situations.
6. Simple application process
Often, the application process for payday loans is completed online. All you have to do is fill out an online form with a few personal details as your payday lender requires. The lender then assesses the information you provide to quickly decide whether to approve the loan.
Endnote
Payday loans come in handy, particularly in case of emergencies. Familiarize yourself with the benefits of payday loans to determine if they’re worth it.