Payday Loans Facts and Features

payday income

Payday loans have become fairly popular type of lending not without a fair reason. Emergency financial situations can happen to everyone and it is only natural to try and solve them as fast and as simple as possible. Surely, this is not the cheapest way to get cash; however, things are not that dark as many payday loan opponents try to make them.

Payday loans are applied and approved within minutes; the transactions usually take less than 15 minutes - and this is a definite advantage as opposed to a tedious procedure in a bank. Payday loans are short-term and they are also unsecured; this is the reason behind the high interest rates charged.

It is definitely not news to anyone that major part of the Americans has to rely on various credits in order to bridge the gap between paychecks. There is no surprise in the fact that those who are eligible for traditional credit apply for one and those who are not (for various reasons, bad credit being a major one) - they have to seek alternatives. In this respect a payday loan is not the worst case scenario.

This is true that payday loans charge a lot for the option. They have one of the highest APR among loans and most of them can be calculated in 3-digit numbers. Something like 391% for a $100 loan taken for a fortnight is an average. It is also seen as predatory lending by many opponents of the industry.

However, the reality is that expensive as they might be, payday loans turn out to be cheaper than late mortgage repayment or a bounced check fee or a credit card delay in payment. It this respect it is much easier to take a short-term loan even with a higher interest than to deal with all those consequences later. Needless to say that delayed rent can cause apartment loss or inability to repair a car or cover a medical bill in time can also be fraught with very unpleasant issues.

One of the most important things to remember about payday loans is that you have to be careful and take the right amount, not excessive one. It is very easy to overestimate your repayment abilities and this is where problems start.

In order to avoid this scenario development, make a loan decision after you have weight all other options and alternatives. When you actually decided to take a loan, make sure you deal with a reputable lender in the first place.