Need a short term
loan? Why not consider getting a pay day loan? It's fast, easy and with the
availability of online-only transactions, very convenient. But they're not for
everyone and you might want to consider several things before you decide to get
a pay day loan for yourself.
What is a pay day
loan?
A pay day loan is a
small loan that is taken out for a short term period, usually one to two weeks.
Because the loan is shorter and unsecured, a pay day loan is fast and easy to
obtain. The only drawback is that pay day loans have higher interest rates. That
is why they are only recommended for people who need short term cash fast and
can pay back the entire amount (plus the interest) within a short time period.
Why is a pay day loan
fast and easy to obtain?
You don't need to have
your credit history checked when you get a pay day loan. That means there is
very little time spent on documentation. Unlike loans that require collateral,
there's no need to offer a property for valuation.
The nature of a pay
day loan allows the borrower to complete his profile fast and the borrower to
check and verify that information easily. Consider this: your average pay day
lending company only requires that you fill out an application form, meet the
requirements and very often, submit it online.
The information needed
to get your loan application approved are easily verifiable (employment
background, monthly income) and it's quite possible to complete within a few
minutes. Some lending companies have even been known to approve a pay day loan
within the day it was filed and the borrower can even receive the money within
24 hours after the transaction is concluded.
I have heard so much
negative feedback about fast and easy pay day loans. Should I be worried?
Lending companies who
offer pay day loans operate legally and many state laws actually regulate pay
day loans. Lending companies are also often under the watchful eye of both the
federal and state government, making sure that they don't charge exorbitant
fees.
The problems with fast
and easy pay day loans only happen because there are some individuals who fail
to pay back their loan amount on time. As a result, they end up with higher
interest rates than those they began with. Add to that the principal amount of
the loan and you get a loan that becomes more and more difficult to manage,
especially if you continue to fail to pay it back on time.
Should I be worried
that the transaction is that fast and that easy?
Lending companies know
that in order to keep themselves competitive, they will have to offer better
product quality and faster customer service. Pay day loans are a billion-dollar
industry and the potential for the market is huge, prompting many lenders to
make sure clients are satisfied and business is brisk. This explains why they
choose to operate their loan business in such a way as to provide the right
service at the shortest possible time.
A pay day loan is not
a secured loan so there is no need for a lot of paperwork and verification of
documents, such as those that occur when you take out the bigger loans that
require a security deposit or collateral. With a pay day loan, you simply assure
the lending company that you will pay the loan amount within the agreed period
by providing them with postdated checks.
Pay day loans,
specifically those that are accessible online, are also relatively safe and
secure and you can surf and transact at no risk. Transaction is fast and easy
because the lending company will simply check your employment details and
determine how much loan amount they will approve.
Another reason why pay
day loans are fast and easy is that these loans are smaller in amount compared
to conventional loans. If you need just £500 bucks, there is no reason why you
have to go to a huge bank or financial institution and go through all that
paperwork for just that amount. Pay day loan amounts are easier to disburse.
How do I receive the
money?
Unlike most types of
loans, pay day loan amounts are often deposited into your bank account to be
withdrawn any time you like. This happens within a short period after your loan
gets approved. Once your account has been credited, you simply use the money as
you see fit. It's fast, it's easy and it's accessible.