Bills don’t wait for you and financial emergencies always seem to arise when you are the least prepared for them whether it is a hospital bill or a car repair.
However, if you are in a financial crux then you do have options like instant payday loans, which aim to help people. These loans are smaller loans with short terms that will help you through a rough patch until your next paycheck.
Here is a look at some surprising benefits of instant payday loans.
An instant payday loan is instant, which means you will be able to get the money that you need and fast.
A payday loan is easy to apply for and you will receive the money that you need within just a few hours. This is highly useful for someone that needs to pay an unexpected bill immediately so that they are able to avoid any late fees.
You can easily end up in more and more debt by missing payments and getting a payday loan to cover these will supply you with more time to get your finances back on track.
There are No Credit Checks
The majority of payday loan lenders will not even look at your credit report after you have applied. This can be a huge benefit to those that have had a knock on their credit report and are now sitting with bad credit.
Usually, if you have bad credit traditional lenders will reject your application, but payday loan lenders will give you the approval that you need and quickly and you can get the money.
Your Credit Rating Is Protected
Generally, payday loans are not reported to credit reporting companies, so your credit score will not be affected.
This then makes payday loans a good way to work on your immediate debt without it creating penalties on your credit rating.
However, you will need to make sure that you are able to pay off the instant payday loan, because if you can’t then the lender does have the right to report you to a debt collector and this will appear on your credit report.
Wait…There are more benefits…
You Don’t Have Any Credit
There are many young people that have not yet built up enough credit, which means they will struggle to get a loan from a bank.
Making monthly payments on a car or a mortgage, shows banks that you are able to repay debt on time and without this, they may not even look at your application.
However, you may face the same financial situations as an adult, but without any credit, you are not able to get a traditional loan, but you are able to get an instant payday loan, which will then help you in times of emergency.
A payday loan does not require you to show proof of credit in order to be approved. You will just need to be 18 years old, have a checking account and a steady income.
Interest Rates are Capped
There is another side of instant payday loans though. In return for getting the cash that you need quickly, the interest rates are higher than longer term loans.
The interest rate on a payday loan can be anything between 15 and 30 percent.
However, many countries have capped the amount of interest that can be charged on a payday loan, so have a look and see if there are caps on the interest rate for the loan you are interested in.
Getting Higher Amounts
You will need to be aware of the amount that you are able to borrow through an instant payday loan. A payday loan is a short-term loan, which means the amounts that you can borrow are quite small.
Have a look at the maximum that you are able to borrow and comfortably afford and determine if it is enough to cover all of your expenses that you need to pay.
If not, then you will need to look at building equity so you can borrow more.
You can do this by proving that you are worth the risk. If you have borrowed from the lender before and paid the loan amount and the interest back on time then they may allow you to borrow more the second time and slowly raise the amount of money they will lend you.
Also, the amount that you are able to borrow from a payday lender will depend on your monthly salary as they will not lend you more than you can afford.
They Are Just Easy
Payday loans are super convenient and you are able to apply and be approved online. You will not need to go anywhere or have wads of paperwork to apply for a payday loan as you can do everything from the comfort of your home with a computer.
Also, instant payday loans give you cash, which means you are able to use the loan on anything you like. Traditional loans usually have a specific purpose attached like a car loan can only be used for a car.
With cash that is paid directly into your bank account, you have the freedom to spend it on what you need.
Instant payday loans are beneficial to those that need them for a financial situation that may arise and as long as you pay the loan and the interest back on time, you will have no issues using an instant payday loan.