If you have ever found yourself in a position where you needed money quickly for an emergency and you are not able to secure a loan from a traditional bank, you may have considered applying for a Payday Loan. These loans certainly have a place in society and have, in fact, grown in popularity over the last few years. People who take these loans often use them for emergencies – health expenses, auto repair expenses, home repairs – but they are an expensive option so consider a few of the advantages and disadvantages before you decide to jump on a payday loan.
- Best for short-term advances of $1000 to $5000 dollars
- Application process is quick and easy, often completed on the Internet
- Loans are often approved in minutes
- Funds are available quickly
- Taking out and paying a payday loan as agreed may help your credit rating
- Some interest rates can be quite high
- Hefty payments
- Little forgiveness for failure to pay with debt, fees, and interest rising quickly
For individuals who need cash quickly, perhaps to avoid other charges such as bank overdraft fees, a payday loan may provide a quick fix. It is important to know if you will be able to meet the payback requirements, paying large payments on time and with that high-interest rate that can exponentially multiply the amount of money you actually owe. Before applying, always be sure to check if the lender is licensed with the ASIC Professional Register to help avoid predatory lenders and compare loan rates.