While they sometimes get a bad rap in the media, payday loans actually offer many benefits. Perfect for a short-term, unexpected financial emergency, payday loans are small loans that borrow against your next paycheck. These loans are perfect for those times when an unexpected medical bill, car repair bill, or smaller than usual paycheck hits you out of nowhere. Here are seven benefits of payday loans:
Easy to Qualify For
Unlike traditional loans, payday loans are easy to qualify for and do not take your credit rating into account. This makes payday loans very useful for borrowers who are not able to be approved for credit cards or traditional bank loans. While rules vary, most payday loan companies simply ask for a few recent paystubs and a valid photo ID in order to qualify.
Helpful When Disaster Strikes
When faced with a natural disaster, many people find themselves in need of extra money fast. Home repairs, lost time at work, ruined food from a lack of refrigeration, and other consequences of natural disasters can quickly drain your bank account. Payday loans are a convenient option in such situations. In fact, recent studies have even shown that the presence of payday lenders helps improve the quality of life for communities that have experienced a natural disaster, and that this benefit also applies to individuals.
They Buy You Time
Taking out a payday loan can buy you time in the event of a financial emergency. Instead of having to come up with an immediate solution to your financial situation when doing so feels impossible, you can take out the payday loan as a stopgap measure. Doing so can help you gain a sense of control over your finances and help give you the time to come up with a plan for avoiding similar situations in the future.
Fast Approval Process
One of the main benefits of taking out a payday loan is that the approval process is very fast. You can typically expect to be approved and have your cash in hand almost immediately after meeting with a payday loan representative. This is ideal for emergencies when you simply cannot afford to wait for your loan.
Limit is Determined by Your Income
When you are approved for a payday loan, the limit is determined by your income. This means that the loan available to you will not typically exceed your normal paycheck amount. This is a benefit, as it helps borrowers from accidentally taking out a bigger loan than they can afford to pay back.
Unlike banks, which often have limited hours, payday loan companies often stay open well outside of normal business hours. Some payday loan offices are open late at night and on the weekends, meaning they are there for you whenever you experience a financial emergency. Even more conveniently, many payday loans can now be applied for and approved online.
Help You Avoid Financial Problems
When used wisely, payday loans can help you to avoid serious financial problems. For example, taking out a payday loan when your bank account is about to go into a negative balance can help you avoid costly overdraft charges, or even having your bank account shut down.
You could also use a payday loan to cover your rent in order to avoid eviction and to make credit card payments on time in order to avoid late fees and a ding to your credit rating.
When used responsibly, payday loans can make your life less stressful and help you get through difficult financial times. By taking out a payday loan, you can easily experience these benefits for yourself. For more information, visit http://www.1stchoicemoney.com.