A look at the advantages and disadvantages of the short term payday loans

Same Day Payday Loans

The short term payday loans have become a major source of funds during the emergency situations. People are often seen visiting the same day cash loans companies for getting funds to meet the short term needs of funds.

Are you also tempted to make use of the emergency loans in case any exigency happens? But, before making your move to reach out to these companies, it is of vital importance to educate yourself with the advantages and disadvantages of taking payday loans online. Read further to churn your Brain engines:

ADVANTAGES

  • Fast source of cash: These loans are called emergency loans for a purpose because they are processed very fast and thus can be the helping hand in case of emergency. For instance, if your car gets jammed on the road, or you need funds to meet up an emergency medical bill or you are left with no money to pay your monthly rentals, in all such situations simply apply a payday loans online and get yourself relieved from all the anxieties.
  • Eligibility: While in every kind of loan, the eligibility of the borrower for a loan is dependent upon the credit history. If the credit rating in the past is poor or comes with default, the chances of getting loan seem to be a rare possibility. But, in the case of the emergency payday loans, the credit rating has no role to play. Even if you have a poor or damaged credit history, you are eligible to get the loan because the past records are of no importance when it is about the payday loans.
  • Protects credit rating: The payday loans online help in protecting the credit rating of the borrower. This is because when you take the short term loan, your credit rating remains unaffected by the impact as no entry is done to your credit score as these loans avoid making a mark to a borrower’s credit score. Thus, the emergency funds are raised without bringing even a single mark on the credit rating.
  • Save money: The payday loans help in keeping your hard earned money safe. When you cover the bills using the payday loans, you need not worry about charges such as that of the bounced checks, credit card fees or the bank overdrafts. All such charges get subsided when you take the cover of the payday loan to pay off your monthly utility bills. Thus, your own money remains safe which can be used elsewhere instead of paying the unnecessary charges.

DISADVANTAGES

  • Short term: As the name suggests, the short term payday loans are for a short period only, i.e. for a day or two. In case you require funds for a project where the funds will be blocked for a span of several years or even several months, the same day cash loans will not fit the bill. In such situations, the best option will come in the form of the conventional loans.
  • Smaller amounts: The same day cash loans generally involve smaller amounts given in the form of loans. This is because the sole aim of this loan product is to lift up the individual in case of emergency situation so that he can easily move to the next payday. Even in the event you wish to have a large sum of money for a shorter span of time, then also you need to move to another loan product as the same can’t be done with the payday loans.
  • Charges: Given the fact that the emergency loans, are taken for a shorter span of time; thus the amount of fees as well as interest rate involved is a bit higher in comparison to the conventional bank loans. In case of default on repayment of the loan on the next payday by the borrower, the loan fee almost doubles; thus creating a huge burden on the borrower. Thus, one must weigh the amount of loans and its requirement with the applicable fees and other charges to take a prudent decision.
  • Current Bank account: The payday loan lenders require the borrowers to maintain a current account. In case you are dealing in cash in your business and have never maintained any current account, the payday loan requirement may either compel you to open a current account or look for other avenues to source your funds.