Payday Loans are becoming the new black. More and more people are now turning to payday loans instead of traditional bank lending. When people need money in an emergency, they have a number of different options to choose from. Payday Loans is one that stands head and shoulders above the others. But should you really go for Payday loans when you find yourself in a financial crisis?
Is it beneficial or detrimental to use Payday loans? This article outlines some advantages and some disadvantages of using Payday Loans.
Nays of Using Payday Loans
- Payday Loans are short term loans. People who need large amounts of money to handle a bigger financial crisis can be disappointed with payday loans because the amount of money lent and its payment schedule is smaller than other loans.
- Despite the fact that payday loans have simpler vetting process for potential borrowers, there is one requirement that must be fulfilled. The borrower needs to be employed full time. People who are working on and off or those who have retired and are on social benefits cannot make use of payday loans because they wouldn’t qualify.
- People who don’t have a current bank account cannot make use of these loans. The user may like dealing with cash only, but for them to get payday loans they need to make a bank account.
- Payday loans available online can have a risk of fraud. Not all websites online are genuine and there is a high chance that users may be duped into giving out their financial details for payday loans when it is actually a scam website. It is important that the borrower is able to apply for pay day loans at a website that is reliable.
Yays of Using Payday Loans
- Using payday loans can help you avoid fines and unnecessary surcharges. Not being able to pay your bills for lack of cash can result in late payment fines etc. Using payday loans helps inject cash into the cash flow and allow the borrower to pay off their dues that might result in a surcharge later.
- Payday Loans help you deal with situations that you have not planned for. One of the reasons these loans are becoming popular in the UK is because people can face economic emergency at any time and they need fast cash to get through that emergency. Payday Loans provide that avenue by paying for your emergency tooth filling, car repair, etc.
- They can help the borrower repair their credit rating. There are some financial obligations that need to be fulfilled each month or they could result have a negative impact on your credit rating. Taking payday loans can help you meet your financial obligations and save your credit ratings from falling down.
- People who are struggling with their credit rating can use this method, because it does not give utmost importance to a lender’s credit rating, instead focusing on their need.
These are some of the advantages and disadvantages of payday loans. It is on you to decide whether you want to go forward with it or not.