Advantage & Disadvantages of Payday Loans
We have earlier discussed the general benefits derived from availing PAYDAY LOAN. However we are all aware that there are two sides to everything that exist in this realm. Payday loan is no exception. Although, this type of loan is generally beneficial to individuals who have limited access to conventional BORROWING, we cannot deny the fact that if accessed improperly; the borrower may end up getting himself into more financial mess. Let us therefore discuss in detail the advantages and disadvantages of availing payday loans.
Because of the loan’s easy accessibility especially to the low income group and low credit rating individuals, the loan is an ideal way to solve and cover immediate financial requirements. The very few requirements demanded by the payday lender, makes it quite easy for the borrower to get his needed cash at the opportune time. The loan also guarantee discretion considering the loan arrangement is only between the borrower and the main lender. Second, some payday lenders, gives the borrower an option whether to secure the loan or not. Having it secured will allow you to get your loan faster and with less interest unlike if you borrowed without putting up collateral. Third, payday lenders usually offer short term loans thereby encouraging you to budget your income to ensure that you will be able to pay on time. Finally these types of lenders normally set the maturity date on the time that the borrower are normally liquid such as the end of the month where monthly, bi-weekly or weekly salary is due.
Payday loans are normally suited only for small to medium cash requirements. They are more suited for immediate cash requirements such as to augment the family’s monthly expenses. If ever the borrower is able to get a sizable amount of money from payday lender, it is for sure that he may end up paying for unexpected high interest on the loan. More importantly, credit ratings of individuals can be greatly reduced in the event that he (the borrower) is charged with late payment penalties by the payday lender.