Payday Loans & their benefits


A payday loan is a type of short-term borrowing where a lender will extend high interest credit based on a borrower’s income and credit profile. A payday loan from is one of the best ways of raising quick cash to solve a financial emergency. The loan helps to pay for unexpected expenses or late bills before you get your salary. It saves you from penalties imposed on late payments. A payday loan is payable with the next paycheck, which means that you will only be in debt for a few weeks.These loans charge high interest rates for short-term immediate credit. These loans are also called cash advance loans or check advance loans.

 The 5 main benefits of payday loans are outlined below-

1. Speed

Most lenders approve applications for payday loans almost instantly when you provide the necessary information. The application process is simple and quick. You do not need to fill any lengthy forms, as is the case with conventional loans. It may take some hours for a lender to transfer the funds but you can get the funds on the same day or on the following working day. Some lenders transfer funds within an hour if you provide the required details fast.

2. Convenience

All the processes and interactions involved when applying for a payday loan are conducted online. You do not need to book an appointment with a loan officer or call your lender severally to get cash. One advantage of a payday loan over a credit card is that you get your credit in cash. You can only purchase goods or pay for services with a credit card whereas you can spend the cash you get from a payday loan on anything including paying your electricity bill or repairing your car.

  1. Few Requirements

Accessing a payday loan is easy because you only need to meet a few basic requirements. The most important requirement is a stable source of income. As long as your income is consistent and verifiable, you are almost guaranteed to find a willing lender. Traditional loans may require collateral. You do not need any collateral to get a payday loan.

  1. Payday Loan amount

Many payday lenders limit the loan amount that new borrowers can access. You can only access an amount that is within your salary range and the lender’s range. When you pay for your first payday loan on time, your lender can increase the amount that can access in your subsequent applications.The minimum and maximum amount that lenders give for payday loan depend on the laws in your state.

  1. Protecting your Credit Rating

The short repayment period for a payday loan may seem like a shortcoming but it is an advantage if you want to protect your credit rating. If you apply for an installment loan, you will have one or two years to repay the loan. Anything can happen within that time. For instance, you can lose your source of income or fall sick before you finish paying the borrowed amount. If you do not have an alternative source of income you will miss some installments as you look for another job.

Payday loans can be a useful tool for borrowing a small amount of money for a short amount of time. When used correctly and with good intent, you can have a positive experience with a payday loan that will yield the results for which you set out.