With the economy still being a long way away from making a full recovery, it is a possibility that like many other people you are also experiencing financial hardship of some description. The payday loan is an option that you may have thought about, but with so many financial institutions offering similar but different products you may not be sure of what to do. We shall try and make things clearer by looking more closely at the details of these loans and deciding if they are actually worthwhile.
You may not know, but a payday loan really is simply a loan of small value for a very short period of time. The purpose is to allow the borrower a bit of breathing space so they can use the money to pay essential household bills and such like before having to wait for their next salary credit. This is all done online 99% of the time, although for those not connected there are still a handful of companies that are happy to accept applications by telephone.
Paying the loan back happens when you are paid as funds are taken straight from your account electronically. The loan itself and the charge for it come out as one single payment. If you cannot pay it back, you may extend the borrowing period by a further month if you can pay just the charge, although this naturally will cost you more.
The reason that people tend to go for this borrowing options is because they have been unable to borrow money elsewhere. Even if you have a poor credit rating you are likely to be accepted as over 90% of all loan applications are approved. Only basic personal details have to be provided and in truth little effort is made to verify the accuracy of the financial details given.
There is no need to worry about any unwanted calls to your boss at work, as these kind of verification checks are rarely undertaken. Even credit checks are not usually carried out and privacy is always maintained. You may be asked to send pay slips or bank statements if there is any doubt about the authenticity of your application, but again this is usually not necessary. If you do still have concerns then calling the provider to check on their specific procedures is always a good idea.
The main benefit of borrowing this way really is the ease of the whole process. The application can be made and approved within ten minutes and funds usually can be paid that same day. No human interaction is necessary and the entire procedure can be completed from the comfort of your own living room.
It is necessary to point out the very real disadvantage of the payday loan, which is the cost. Interest is unbelievably high as, with all sub-prime lending, there is a greater risk of default. There are many states in the US which have made these loans illegal, and there are still numerous campaigns against them all over the world as there is a belief that they exploit the plight of some of society’s more vulnerable members.
The payday loan may be appropriate for some, but it is not advisable to enter into such an arrangement unless you fully understand the terms and conditions of the loan. Before committing, it is always best to review all the options you have available to you in detail.