No matter how good some things are, you can’t help but acknowledge that each of those has its advantages and disadvantages. You see, nothing in this world is for free these days. You pay for every necessity you have, whether it’s for instant use or long term comfort.
A good example is getting a Payday Loan. As enticing as it sounds, especially during a financial crisis, it still has its pros and cons to consider. It’s crucial to know what you’re getting yourself into before committing to taking on this added responsibility.
Here are some of the Advantages and Disadvantages when taking out a payday loan.
The Advantages of Payday Loans
- Instant cash for immediate financial needs.
I bet everyone has experienced missing a rent or phone bill payment for a month or two. With this, you realized that you couldn’t pay all those missed payments in one go as you have limited income to help you survive until the next paycheck. By applying for a payday loan, you can settle missed payments without having to worry about how you survive with your paycheck.
- Requirements are simple and straightforward.
Lenders only care about you being employed. Since you have a source of income, you can pay your loan on the next paycheck. Lenders don’t present you with a long list of requirements to qualify for a loan.
- You need not visit the bank to make the application.
Especially with the whole pandemic going on, lenders are all the more encouraged to take applications virtually. They are making it easier for loan applicants to apply by phone or email.
- Approval is fast, and money is immediately deposited.
You don’t need to do a follow-up since lenders will immediately respond whether you’re approved for a loan or not. Once approved, your money will be reflected in your account without a need for any confirmation.
- You don’t suffer from long amortization schedules.
Since it’s quick cash and the loanable amount is controlled for a maximum of £1000 only, you have a higher chance to pay it off as quickly as possible. Dealing with a huge debt for a long time can put a strain on your income and overall finances.
The Disadvantages of Payday Loans
- You have to repay the loan as quickly as you got it.
Time can fly by so fast, just like enjoying your newly released loan. The quicker it arrives, the quicker you have to pay it off. Payday loans are meant to be paid by the next paycheck in full. Having enough balance in your account is a must to avoid penalties.
- You might deal with high-interest rates and additional charges.
Do not forget that apart from the loan amount you took out, the interest rate and other charges shall be dealt with. It’s important to know how much you are capable of paying before deciding how much to borrow. The additional fees might support you during payback time.
Key takeaway
Applying for a payday loan might sound easier, but it also has its responsibilities to commit with. If you know your needs, you should identify them now. This way, you can avoid over-borrowing and won’t fail to pay for it. There’s nothing wrong with getting fast cash through payday loans. But it’s wrong if you don’t have a good purpose for using it. Then again, payday loans might not be for everyone. The pros and cons presented above are to help you decide whether it’s something you like to have or not. If it best fits your need for the moment, then this route might be just what you need.