While there are some risks associated with payday loans, it is not necessary that these loans are bad. In fact there are some benefits associated with them as well, as they can help you save face while in a credit crunch situation.
So let’s take a look at some of the top benefits the payday loans come with:
1. Quick Application Processing Time
Although interest rates on payday loans can be quite steep, the best thing about them is that getting a payday loan is very easy and the application processing time is very short. Not only that, the verification and approval process is also quite quick which means you only need to fill a couple of forms to be able to get these loans.
The reason for such quick application processing is that there is no need of a credit check, which ends up taking a bulk of the time normally. Payday loans can generally be made available within 24 hours although some companies take even less, a few hours or so.
2. Quick Money
Although this may sound obvious, but the main purpose behind payday loans is to provide quick money to you whenever you run out of cash, so as to help you save face in such situations. Also since other types of loans require much stricter approval, at such times payday loans come to the rescue as they do not have any such stringent requirements for securing these loans.
So even if you are not eligible for any other type of loan, due to whatever reasons, you can still get these loans in short time just by providing your identification and showing proof of a bank account and steady income.
3. Short Payment Time
Another advantage of payday loans is that unlike other types of loans, you won’t be bound by the terms to keep paying the loan for long periods of time. Whenever you get your next paycheck, you can just pay off the loan amount.
Although the payment time can be extended for some additional fees, I would advise against doing so and would recommend you to always try to pay off the loan as soon as possible. This is especially helpful so that whenever you need to borrow money again, you can get another payday loan without having to run everywhere asking for money.
4. Maintains Credit Rating
As you might be aware, if your credit score is bad, you won’t be able to get a personal loan in most cases. However the benefit of payday loans is that even if your credit score is not up to the mark, you can still apply for and get approved for a payday loan since payday lenders do not look at your credit history.
Also, if you manage to pay off your payday loan in the required time, your credit score will remain unaffected.