Payday loans are a specific type of borrowing that many people now know about despite it being reasonably new compared to more traditional means. There are some main differences between them and more standard methods of borrowing and it is good to think about whether they might be suitable for you. There are not really any traditional loans that compare to them, so it is good to have an understanding of the main features so that you can decide whether you feel that they will work out for you.
Lend to all
The main selling point of payday loans is that they will lend money to almost anyone. They do not worry about whether you have a poor credit record, they will just look at you age, place of residence and check that you have an income in order to decide whether to lend to you. Most traditional lenders will look at your credit record to see what it is like and use that to decide whether to lend to you. They will want to see whether you have a history of making payments on time, this can include bill payments, contracts and loan repayments. They might also look at how many debts you have, if you have been turned down by lenders and whether you have a secure income. This can mean that anyone with a poor credit record is at risk of being turned down for a loan. This will then be marked on their credit record and make it even harder to borrow money. A payday lender will look at the credit report but will not judge on the same basis. They will want the borrower to have an income but that is pretty much all they will be concerned with.
Quick to lend
A payday lender tends to organise loans really quickly. This means that they can be really useful if you need money in an emergency. They will often be able to get the money to you within a few hours. It will be up to you to complete the application accurately and quickly and provide them with all of the information that they need so that they are able to get it organised quickly. Some lenders will be quicker than others and so if you do need the money really quickly, then it is wise to check this first. You will want to make sure that you can get the money when you need it. It is likely that there will be some lenders that will be able to act very quickly and therefore it could be important for you to find them and use them, rather than alternative lenders. If you use traditional lenders you will normally find that it can take them significantly longer to arrange a loan for you.
Quick to repay
A payday loan will normally need to be repaid within a few weeks of borrowing the money. The idea of them is that you borrow the money until you are next paid and so this will not be longer than four weeks. The money has to all be repaid in a lump sum on your pay day and this means that you will clear the whole debt in one go. This can be really useful as you will not be in debt for very long and you will be able to limit the amount of interest that you are paying as it is often calculated daily. Some people are not keen on the idea of being in debt and so the fact that this can be repaid really quickly will be particularly welcomed by them. It can be great to know that you will not be borrowing for long and that you will be clear of debt once you are next paid. Of course, it will be up to you to make sure that you will have enough money available for the repayment and that you will then have enough money left over so that you can pay for everything else that you need to buy.
There are not many other loans where you will be able to get the money that you need even if you have a poor credit record. There are a few though and the way that the payday loan is different to these is that the money is repaid within a few weeks in full. This can be advantageous both with regards to the cost of the loan as well as meaning that the debt and any stress associated with it, will soon be cleared. It can also be very fast to organise which is particularly useful to those that need money in a hurry. Many of us might have emergencies, where we have run out of money and need some fast and these loans can help with this.