Payday loans are widely discussed amongst salaried people and others, for its advantages and disadvantages. There are debates between the consumer group and financial companies especially lending companies. The former clamoring that the system is draining money from poor and enriching the powerful and rich while the latter affirmed that it is the ultimate in lending for customer’s convenience.
Our Benefits:
- Receive up to $1500 the same business day!
- Lowest interest rates
- No credit check
- No documents to fax
- Fast & easy approval - no long forms
Therefore, the question is whether the pay loan is good or bad. If we look into the positive side, it is the only easily and quickly small loan available for immediate and sudden needs although the rate of interest is high The Banks have no interest to cater to this segment at all. The personal loan facility that they offer is extremely cumbersome and time taking. The procedures sometime bordering to humiliation and the period of waiting is so much that the very purpose or intent of the loan is lost.
There are other aspects also which favours payday loan over others. A credit card deadline or check bounce prospects will amount to more overall financial losses. Further, by avoiding a bad credit report will keep your records clean for future bigger loan facilities from Bank. So, even apparent one time extra interest payment in payday loan is beneficial comparatively.
In the disadvantage side, the rate of interest is one on the higher side. It may be lower than credit card, but typical loan interests are much lower than payday loan. There are community loan, credit unions etc. which gives loan at a much cheaper rate. Payday loan customers are mostly uninformed citizens who are not aware of such facilities and gets easily impressed by the attractive ads of the lending companies.
Another disadvantage of the payday loan is, there are many one sided terms in the contract like automatic loan renewal on payday , hidden fees, high rate of interest for late payment etc. which are tactfully hidden in words in the contract . Some lending companies do not reveal their interest rates which is illegal and forbidden by law. So, extreme caution should be exercised by the borrower in proper assessment of contract clauses before finalizing the transaction.
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