If people fully disclosed their financial history and activity to you, you might be quite surprised to discover that most of them have taken out a payday loan at some point in their lives.
Whether they’ve been struggling to pay the household bills, needed to quickly pay a deposit on a vacation or car or just wanted some extra cash to see them through the month, there are many reasons why people get loans.
However, you might be wondering why they don’t take a more traditional route and apply for a bank loan or other type of loan.
Well, there are many reasons why borrowers choose payday loans over every other type of loan, and we’ll tell you some of them.
1. Payday loans are quick
When people need money and they need it fast, they simply don’t have time to make appointments with the bank and discuss in detail how much money they need and what they need it for.
They want $500 as quickly as possibly, and thankfully, payday loans are very speedy. While it’s not guaranteed that you’ll get the money on the same day as you apply, many customers have known the funds to be in their bank accounts within hours.
Even if it takes longer than a few hours to get your loan, you shouldn’t expect to wait longer than 3-5 business days.
2. They are easy to qualify for
Compared to bank loans, payday loans are very easy to qualify for. Many payday lenders don’t use the three traditional credit bureaus to carry out credit checks, and instead use smaller lesser-known bureaus to have a look at your financial history.
Even people with poor credit can get payday loans, since a bad credit score doesn’t mean you’re automatically disqualified from getting a loan. You might have made poor financial decisions in the past, but the lender is mainly concerned with whether or not you’re earning enough money to pay back the money you want to borrow.
The criteria for payday loans is relatively simple – you must be at least 18 years of age, you should have a job and some form of income, and you need to have a bank account into which the money can be paid.
3. It’s convenient
Parents, full-time workers and older people don’t have the time or energy to spend making lengthy trips to the bank or loan shops to try and get the money they need.
With payday loans, you can apply online in a matter of minutes, and although you might be asked to submit some documents, there is likely to be no faxing involved if you’ve uploaded the documents to a computer or other device.
You don’t even need to specify why you want to borrow money – it’s a complete ‘no questions asked’ procedure and you can spend the cash on whatever you like.
4. Payday loans are flexible
Most lenders will offer loans between $100 and $1000, and you can choose the amount you want to apply for.
Depending on your income and other factors, you might not always qualify for the total amount you’ve applied for, but if you’re offered a loan, you’ll be told straight away how much you can borrow.
You can then go and spend it on whatever you want, unlike a mortgage, for example, which would need to be spent on a house.
5. You can apply for them whenever you need
Just because you had a payday loan last month doesn’t mean you can’t apply for another one for this month.
We understand that people are often in constant need of extra money to cover bills or pay for the things that matter to them.
However, it is strongly suggested that you don’t apply for another loan until you have paid back the previous loan you have taken out.