There are many reasons you may need money before your next payday arrives. Your car could require emergency repairs that you may not have enough money to pay for or you may need to pay an unexpected bill. Whatever you need the money for, taking out a payday loan is a good way to get cash when you need it.
The Advantages of Payday Loans
There are many advantages to taking out a payday loan. The application process is easy and the decision is usually fast regarding your application. In addition, you can take out small amounts of cash and not have to be responsible for monthly payments.
Easy Application Process
When you go to a bank or a similar lending institution for a loan, you have to fill out a lengthy credit application. They will want information about your employment, your income, your past credit history and, sometimes, they will want you to list people who will confirm some of the information on your application.
When you take out a payday loan, you usually just need to supply where you are employed, confirm that you have a bank account and the date of your next payday. A payday loan isn’t credit, so you don’t have to go through a lengthy process to take out the cash you need.
In many cases, you don’t even have to go to the business to apply for the money you need. You can often apply and complete the loan process online. Many payday loan businesses offer online applications and they will transfer the funds directly to your bank account if the loan is approved.
Fast Decisions
Although you can apply for a traditional loan from a bank or another lending institution in order to get the money you need, it often takes a few days before a decision is made on your application. The lending institution will also base their decision on why you need the money. If they don’t believe it is a good investment for them to lend you the funds, your application will be rejected.
With a payday loan, the decision is made in just a few minutes. They will confirm your information and you will usually supply a bank account number for the funds to be withdrawn from for the amount of the loan. Once that is done, the payday loan business will supply you with the cash you need. They don’t care what you do with the money as long as you can pay it back on time.
Small Loan Amounts
If you only need a small amount of money, taking out a payday loan is a better option than applying for a loan with a bank or another lending institution. You can borrow loan amounts as small as £50. Most lending institutions will not consider such small loan amounts. Since they make their money back from interest payments, they want their customers to take out significantly larger loans and make repayments every month.
Doing Business with Reputable Businesses
When you decide to take out a payday loan, you need to make sure you are doing business with a reputable company. While some companies provide loans responsibly, others do not. If you do end up getting a loan from a disreputable payday loan establishment, you could end up repaying too much for the loan or pay fees that you shouldn’t.
Finders Fees
Many payday loan services that match lenders with customers will not charge a fee for their service. You should be suspicious of any service that does ask for a fee to find a payday loan company willing to lend you money. A company’s services are usually paid by the lender, not the customer. If you are charged a fee to match up your payday loan application with a lender, then that could be one sign the company you’re working with is less than honest.
Information Upfront
Everything you need to know about your payday loan should be explained before you borrow money. A reputable company will explain everything about the loan process to you before you apply for a payday loan. This information will either be available on their website or they should go over it when you go to their location to take out a loan.
Disreputable payday loan businesses will often neglect to explain the entire process to you or there may be information they purposely hide. This information could be about the fees they charge or their interest rates. The interest rates can vary between payday loan businesses and some payday loan companies will take advantage of people needing emergency cash and charge extremely high-interest rates.
Legally Compliant
Due to some payday loan companies taking advantage of people in dire situations, the government does have rules to which these businesses must adhere. A legitimate payday loan business will not only be upfront about their process, but their loan process will also comply with the government’s rules and regulations.
A less reputable business will try to work around these regulations or ignore them altogether. Their sole goal is to make money and they will do whatever it takes to turn a profit. Unfortunately, that may include breaking the law.
Do Your Research
Before you decide to take out a payday loan when you need emergency cash, get to know some of the regulations that these businesses must follow. Even if you just know the basics, you will be able to easily tell when a payday loan company is doing business less than honestly. It will give you the information you need to avoid being overcharged for loan services and interest.
A reputable company will not try to force you to take out money that you don’t need. Payday loan companies specialize in short-term loans in small amounts, so if someone tries to push a larger loan onto you, consider going to another company. If you work with an honest company, taking out a payday loan is a good way to get money when you need it fast.