Many people that are in some sort of financial problem often debate whether or not to get some payday loan. So, people keep on asking that is there any benefit of Payday Loans or not? Actually it depends on person who’s getting the loan and the fact that if they can afford it or not. Some advantages as well as disadvantages are associated with payday loans and it should be considered and figured out whether they are of any good to people or not.
Merits of the Payday Loans
One major advantage that is often associated with payday loans on the same day is the fact that you don’t really need to have good credit rating for qualifying for such loans. If one possesses a steady job and is in it for at least six months, he’ll qualify for the loan. Furthermore, you don’t need to have anything as collateral for these small loans. Rather these are just adjusted for amount of the check normally. Larger loans are, however, offered to those in need of it in some bad situation. One more benefit is the fact that most of the people in need of payday loans can easily get them. The lenders ensure that the person in need of funds gets them for making best use of them and get rid of the bad situation they are facing.
Demerits of the Payday Loans
With many merits of these loans, some demerits also exist which should be kept in mind. People would find interest rate to be comparatively higher. On most of the occasions the rate of interest might be around 60 percent or even higher. It’s definitely something far higher and the borrower will have to repay above half of borrowed amount. Furthermore, these loans can destroy your credit rating in case you’re unable to pay and might also be subjected legal action as well. If someone demands for more time for repayment of the loan, they’ll end up paying even more than what was initially owed. It’s kind of slippery slope which keeps dragging people having good credit history and take them to a spot where they don’t really qualify for literally anything.
So what does it mean? Is having payday loan something or bad? In most of the cases people should find out what other options are available prior to deciding on taking payday loan. The major reason behind this is that if there is some option through which some money can be saved then one should straight away go for that particular option. But in case if no other option is available and one really needs some amount of money for overcoming the short-term expenses, then they can’t really find an option which is better than payday loans. The extent to which these loans are beneficial actually depends on the situation in which this option is being considered. It can be beneficial in some case and can have some disadvantages in certain cases as well.