Payday loans have been around for quite a long time now but there are still many people that do not think that they are worth getting as they feel that they are not the right loan for them. It is worth knowing a bit more about them so that you can decide whether they are the right loan for you.
For those with a poor credit score
Payday loans were brought out in order to help those people who have a poor credit score. With a low credit score there were no borrowing options available. Someone noticed that those people could do with help with borrowing money and so set up payday loans. These loans have no credit check and therefore are available to anyone. However, you do not have to have a poor credit rating to take on the loan, but you may find that if you do have a good credit score you will be able to find an alternative loan that will be cheaper. A payday loan is expensive because of the risk that is being taken by the lender by allowing those with a poor credit score to borrow money.
For those in a hurry
A bad credit payday loan can often be set up extremely quickly. It can sometimes only take a few hours to approve a payday loan. This means that if you need money urgently then it can be a good solution for you. You will find that it is quicker than other types of loan. This means that unless you can pay on a credit card or overdraft that you already have set up, the loans can be useful for anyone who needs money quickly.
For those needing a small loan
Often when you borrow money, you will find that you have to borrow more than you need. You may find that loans start at a thousand dollars and if you only need a few hundred, you can end up paying a lot more for the loan than necessary. It will also take a lot longer to repay the loan. This means that if you just want a small amount of money then these payday loans could be the answer as you will be able to borrow a few hundred dollars.
For those wanted a short term loan
Sometime sit can be stressful to think about having a loan hanging around for a long time. Personal loans can often last a year or more and if you have a credit card then there is no deadline for repaying it. This means that you could find that a loan seems to last a really long time. Some people find this stressful as they have to be always thinking about where they will find the money for the next repayment or that they just feel worried about owing money. Some people also worry about what may happen if the prime rate goes up and their loan interest rises. With a payday loan the interest is fixed and so you will know exactly how much you will need to repay.
So, as you can see, a payday loan can actually be for anyone. They have a lot of potential markets and you do not have to just fit into one category to apply. Most people will be accepted for a loan as well. You do not need a credit check but you will need a checking account so that a direct debit can be set up to pay the loan on your pay day. You will also need a job. Although this is not specified by the lender, it is also wise to make sure that you are able to repay the loan. You should be able to fairly easily find out how much you will be expected to repay and when. Generally, you will have to repay the loan in full, including the interest on the next day you are paid after taking out the loan. This means that you will need to make sure that you have enough money available to do this. You will also need to make sure that you have enough money to cover all of your other costs that month after that chunk of money has been taken out.
Some people do struggle to find the money to repay the loan even though the repayment comes out on their pay day as they have a lot of other things to pay for too. Some of those that do manage to pay it off then struggle to pay for everything else they need. Therefore, it is really important to make sure that you will be able to afford it all. It is wise to cut back on your spending if you can, to make sure that you have enough to cover the loan cost.