Are Payday Loans Still Popular Among Borrowers

Explore by Category
By : Admin
Loan 21/01/2019 12:45pm
284 view(s)

From time to time, the need of additional money in hurry arises. This could be due to some unexpected financial requirements which are just cannot be avoided or delayed. With having only restricted monthly income in hands, it can be impossible to deal with emergencies and thus push you into external borrowing. Earlier, when people were not more into using credit cards and other financial options, the only tempting option that they can think of is applying for a payday loan. Fast approval, easy processing, quick funds and direct fund transfer lead to the increase in demand of payday borrowing. But, have they still holding the same popularity? Are people still taking out payday loans? Well the answer lies in borrower to borrower, as many are aware of other borrowing options and preferring them over payday loans, but some are still favoring payday loans. Let’s take a look at what are payday loans, how they work and what other borrowing options are available in the market-

Learn about the facts of payday loans:

Payday loans are a short-term based borrowing option. They provide you fast money when you need it the most until your next paycheck. It goes roughly for a month or 2 to 4 weeks. They are meant to handle any sort of short term financial emergency that has knocked your door at any time in a month, without any advance notification. Such loans do not involve any cumbersome formalities and they are easy to apply and fast to approve. They are little expensive, as lenders will charge them with a higher rate of interest due to their short term financial nature.

The process of getting a payday loan:

They can be applied by anyone having regular source of income and be over eighteen years of age. It is also necessary to hold a valid healthy bank account in your name for direct supply of funds.

Know about the advantages and disadvantages of payday loans:

Advantages

  • Easy processing
  • Simple qualifications
  • Fast approval
  • Offer fast monetary backing
  • No restriction on the usage of borrowed finance

Disadvantages

  • Expensive borrowing option
  • Charged with higher rate of interest
  • Not everyone’s cup of tea

Know how you can use a payday loan:

They are best to be applied during extreme emergencies. Any sort of unplanned expenditure like paying for bank overdraft, house rental due, child’s education fees, sudden medical aid, small home or car repair charges can be easily settled on time by using the amount procured upon approval against payday loans.

When you should get a payday loan and when not:

Payday loan is not apt for long-term financial goals. They are meant to use for short term financial purposes only. For expensive requirements, you should get a personal loan with secured and unsecured options. Payday loan is meant to handle any sort of unforeseen monetary event that can be covered by the amount offered under these loans, based on your needs and your repayment capability. It is important to understand your needs first and then apply for a loan accordingly. As this loan is charged with such higher interest rate, you should go for it only in you can able to pay them back on time. Non-repayment of the loan will result in huge penalties and enhanced interest charges.

Other useful borrowing options available:

Nowadays people are making liberal use of credit cards and are investing in several financing options available. Banks are offering several temping offers to take out financial help when need with affordable interest rates and terms. If you have a good credit score, you can able to get the best credit card with several amazing benefits. Today more people are getting awareness through various mediums and are considering credit cards and other financing options over applying for a payday loan. Some of the best borrowing options available are credit cards, an overdraft with affordable interest rates, flexible loans etc.

In conclusion, payday loans are very much a viable option among several salaried class people who refrain themselves from using credit cards and do not invest much in other financial options, because of lack of understanding or mere preference. However, today more and more people are driving into using credit cards and maintaining their financial condition with ease. So, popularity and need of having payday loans in crisis is very much depend on borrower to borrower. According to a recent survey it has been found that salaried people in USA from all age group have been using payday loans to fill the gap between their consecutive paydays even though they have to higher interest rate for such small amount of funds. Well, it is not at all surprising, as they indeed are very popular among salaried class individuals to get extra cash immediately for any sort of emergency situation.