Tag Archives: payday loan
Comparing Payday Loans To Personal Loans
Payday loans have, in many people’s eyes, a reputation as being an expensive form of credit. It’s certainly true that the imposition of a flat fee of 10% to 25% of the loan amount works out to be a very high APR when you take into account the short term nature of the loan, and although taking out a payday loan may actually work out to be cheaper than some other forms of finance such as long term credit card debt, the interest rate will still be much, much higher than that of a personal loan. So why do people take out payday loans if they’re so costly?
The first reason is simply speed. Many people resort to a wage advance when they literally don’t have any money left at the end of the month, and yet have bills to pay and food to buy. A payday loan can be arranged on the same day you apply, with the cash in your account the next day. A personal loan simply can’t compare to this – there will be complex forms to fill in, credit agreements to sign and return, credit checks to be carried out… the list goes on. When you need quick cash, a payday loan might well be the only answer.
Another advantage of these loans is the fact that you can borrow only a small amount if that is what you want, just enough to see you through your current cash flow problem. Most personal loans have a much higher minimum amount you need to borrow, and if you don’t need that much then you’re saddling yourself with unnecessary and unwanted debt.
A related point is that the repayment term of a payday loan is, by its very nature, a lot shorter. While the APR rate on a personal loan might appear to be much lower, by spreading the repayments over a longer term you may well end up paying more in interest overall. The combination of having to borrow a larger amount over a longer period is certain to cost more in the long run than taking out an advance of just the amount you need over as short a time frame as possible.
The final reason is that because of the way payday loans work, they’re very easy to be approved for. People with all kinds of credit ratings are likely to have their applications accepted, which is certainly not the case with other forms of finance.
No personal finance expert would recommend taking out a payday loan lightly, especially if you get into the situation of having to renew the loan every month, but taking the above advantages into consideration it’s easy to see why sometimes payday advances can actually be a perfectly prudent way of bridging a temporary financial gap.
Bringing One Hour Payday Loans Out Of The Dark Ages
The recent revolution in the availability of one hour payday loans simply reflects the current state of the world’s economy. More and more families are having to scramble to pay their bills and make ends meet. Forbid they should ever fall prey to some type of financial emergency such as a sick child or a thrown rod in the engine of the family car. One hour payday loans of the past were often shady, back alley operations that were barley recognized much less regulated. But those days are gone with the changing times and the realization that this once looked down upon operation, with a little retooling, could provide a safe, legal and easy means to help consumers out of a financial bind.. In the bad old days cash advance lenders would take advantage of customers who obviously were not going to have the means to pay them back. Then would continue to pile interest and fees on top of the unpaid balance to the point that payback was an impossibility.
Today one hour payday loans are easily accessible on the internet eliminating even the necessity to go down to the corner pawn shop to apply. Modern online forms are quick and painless. And because you apply from the privacy of your home, gone also is the embarrassment of having to reveal your financial status to a complete stranger face to face. Simply by proving that your are 18 years of age, have verifiable income from a job that you have held for at least 90 days and have some type of active bank account that has direct deposit set up you are well on your way to becoming approved. There is no need for a credit check or any type of inquiry into your credit history and no collateral is required. The reason for this is that the lender will extend you a short term one hour payday loan solely on the promise of a post dated check that you provide online. Once approved, the funds are wire transferred to your bank account where once received they are ready for your immediate withdrawal.
Of course securing a one hour payday loan is not free. In fact the interest rate can be quite high, anywhere from 15% – 30%. Which means for every $100 you borrow on a 25% loan you will be paying back $125. Because these loans are so short term, 30 days tops and more likely a two week repay time frame, the lender must make his money quickly. But the fast turnaround time and high volume of business the lender experiences makes it well worth his while. Many one hour payday loan sites have cropped up in recent years to capitalize on the growing financial instability of our modern society. The vast majority of these operations are legitimate and above board. One hour payday loans have become a way for consumers to quickly and easily secure funds for any emergency situation and these loans are for just that quick cash for emergency situations. These are not loans to vacation on or do your Christmas shopping with. They are to help you, as they have helped millions of people just like you and I, to overcome the occasional financial obstacle that gets tossed our way.