Well, the practice of borrowing money has been around since the time immemorial. In the past, an individual had to rely on his friends and family members for a loan. However, today things have changed for the better. The lending industry has provided a range of options to the borrowers who can easily access to the loan to address their specific needs.
Undoubtedly, lenders are offering a variety of loans, but not all of them are as convenient. By and large, the general public still has to invest a lot of time and effort to avail the required financing. That’s where payday loans beg to differ from the rest. A payday loan is not a new advent by any mean. But it has been modernized by lenders after realizing the changing demands of people.
Here is how a payday loan is more convenient than other loan alternatives:
- Simple application process
In the majority of loans, submitting a loan application is a laborsome work. Applicants have to go to the credit unions or banks and stand in the queue and patiently wait for their turn. In addition to that, borrowers need to stay on top of their paperwork as well. Moreover, preparing for various documents is a time-consuming process. All these factors make traditional loans far less appealing in the eyes of potential borrowers.
When it comes to filling the loan application of a payday loan, you can do it without physically bothering yourself one bit. The reason being, everything has been digitalized, and only an internet connection will get the job done for you.
What’s more, is that the lenders don’t require you to engage in lengthy paperwork. Apart from a few exceptional cases, the borrowers have to provide basic information about themselves, along with some commonplace documents.
You can apply for a payday loan anytime. Unlike banks, payday lenders are not inaccessible on the weekend.
- Flexible criteria
Often, lenders follow rigid criteria, which makes it hard for many people to break in. A sizeable proportion of loan applications is rejected, citing the low credit score as the main reason. However, traditional loans might be sanctioned on relatively poor credit scores, but applicants have to meet a steeping requirement of lenders, that is, keeping something as collateral.
A payday loan’s qualification criteria are not even remotely close to this. Typically, the lending party will confirm that you have a stable source of income. It frees you from the headache of maintaining a solid credit score or collateral asset. In a nutshell, as long as you are 18 years old, a permanent citizen of the state, and can show up with a steady job, you are unlikely to face any hurdle.
- Easy to track the repayment process
More often than not, a traditional loan obliges you to maintain a detailed record of monthly installments. Because the mishandling of the EMIs will lead to the misunderstanding between the lender and the borrower.
A payday loan unburdens you from this responsibility. The submission of the loan approval makes it mandatory for you to log in for a personal account. As soon as your loan is approved, you can easily track all your pending payments in the account. Whenever you confront any confusion regarding your past or future installments, you have to log in to avoid any ambiguity. It does not get any simpler than that.
- The flexibility of returning the amount
Life can be very unpredictable. Sometimes, people regain their financial footing not too long after receiving the loan. For example, you take a loan for 2 years, but what if your finances come back to the track within the next six months? Usually, a traditional lender won’t allow you to pay off the debt early because it will deprive them of the interest.
Talking about a payday loan, the lender won’t bind you to follow such a rule. You can clear the debt whenever you begin to flex your financial muscles. That way, you will not only free yourself from the loan in one go but also end up saving considerable money, which otherwise would have been paid in the form of the interest rate.
- Effortless to shop around
A study has found that a borrower can save around 1500 dollars by getting one additional quote from the lenders.
When a borrower has to shop around to various physical locations, it can be immensely exhaustive. Not to mention the equally tedious stuff like calling time and again to the lender to fix an appointment. Provided all these roadblocks, no matter how much a borrower tries, they can’t be sure whether they are getting competitive rates or not.
Quite the contrary, a payday loan keeps you at a safe distance from going through all this hassle. As mentioned above, since payday loans are digitalized, you can compare the rates of different lenders literally on your fingertips.
- Fast approval
A conventional lender can take up to one week to approve your loan. The reason behind this is that the lenders have to rely on the third-party to double-check the provided documents. If you are applying for a secured loan, this time duration can increase because the experts will evaluate the worth of your collateral asset.
With a payday loan, you don’t have to be on the standby for this long. The lender gives you the green signal by accepting your application within a few hours. The money is also transmitted to your account in the next 24 hours. Rest assured, no other loan type can be a better fit when you are confronting an emergency.
- Freedom of using money
You may qualify for many loans out there, but what is the point if lenders don’t allow you to spend the borrowed amount the way you wish to? A payday lender does not impose their will when it comes to spending the loan. It lies outside their domain.
Though a borrower has all the power to use the money wherever they may like, it is better to utilize a payday loan to cover up short term financial lapses.
- Better regulation
Scams have damaged the overall reputation of the lending industry. Until recently, selling out applicant’s data was a widespread practice even among the personal lenders. But owing to the crackdown of the Financial Conduct Authority, the scammers have reduced. Now only reputable companies are there to serve you.
The final verdict
Unfortunately, many myths are circulating among the common public about payday loans. Of course, if you mishandle a loan, you will have to pay a heavy price for it. And a payday loan is no exception. But if you can manage a loan with utmost precision, a payday loan is surely your cup of tea.