Unexpected expenses become more and more common as you grow up. They often hit out of nowhere too… Your car breaks down on the motorway, you have a light medical emergency, your roof starts leaking or perhaps you need a new boiler.
You get the point, it could be anything, and direct lender loans often represent the quickest solution to sort such problems out.
You don’t want to spend weeks for applications, but get the money within a few days or perhaps a few hours.
Payday loans are self explanatory. They’re meant to be given over a short period of time, less than a month, until your next paycheck kicks in. In some cases, they can extend a bit longer, though.
Is this what you’re after? Is a payday loan the best choice for an unexpected expense? Here are a few thoughts to make a better decision.
Easy to get
There are lots of reasons wherefore more, and more people turn to payday loans, and accessibility is one of them.
Compared to traditional bank loans, you won’t have to fill up too many documents, you won’t need to make applications or wait for days or even weeks. Instead, you can usually apply online, within minutes only.
You’ll need to complete a form, provide some details about yourself and upload some evidence, such as payslips and proof of address.
At the end of the day, you’re dealing with an unexpected expense, so you can’t afford waiting for too long. Some lenders will transfer the money within hours only.
Besides, lots of lenders offer this type of loan, so accessing money has never been easier.
Fewer requirements
More and more people turn to payday loans because of easy access, which is directly influenced by the requirements too.
Lenders don’t have very strict criteria to get someone accepted. Indeed, the deal or the interest rates will vary from one client to another, but accessing the money is still easy.
Someone with bad credit can also apply for a payday loan, especially if they prove they work and they have an incoming check. On the same note, someone with a low income can also apply, but they’ll be able to get less money.
Overall, pretty much anyone with a relatively stable financial situation can apply for a payday loan and get accepted with no further questions asked.
Unsecured loan
A payday loan is meant to cover an unexpected expense, but it won’t be massive. It won’t exceed your monthly income, and for this reason, it’s usually unsecured.
When dealing with traditional banks, people with a low credit score will normally need to bring an asset as collateral, which they risk losing. It’s usually a car. Payday loans, on the other hand, are unsecured.
Sure, you don’t want to end up defaulting on the loan, but at the end of the day, it’s less of a risk to worry about.
More loans at once
Since payday loans are considered small loans, you can normally have more than just one. Of course, it depends on the lender you choose. Some lenders don’t accept that, but others will.
It’s not an ideal case, but at the end of the day, a different emergency can kick in out of nowhere.
Just like for other types of financial deals, payday loans require great responsibility and commitment, so most professionals won’t recommend dealing with more than just one loan at a time.
Competitive rates
Back in the day, payday loans were considered predatory loans. Interest rates were extremely high, and failing to pay back on time could lead to financial collapse.
Things have changed a little lately. Since there are so many lenders out there, the market is more competitive. Even some traditional banks offer short term loans based on the exact same principles. More competition means rates are a bit lower in order to attract customers.
It’s important to know that interest rates are still way higher than for classic loans, such as personal loans. However, interest rates represent the price you’ll pay for convenience and easy access.
On the same note, the more lenders you have access to, the more options you have. Shop around and never settle for the first deal you find.
As a short conclusion, payday loans have evolved a lot over the past decade. Rates are better, while access is still easy. They’re convenient and super fast, so they’re specifically aimed at unexpected situations, such as a car breaking down or a problematic appliance.
The market is more diversified than ever, not to mention the special offers you’ll find everywhere. Even when dealing with an emergency, you’ll still have to take your time and go for a reputable lender with a good offer. Browse the market before deciding, and if an offer looks too good to be true, it probably is.
Disclaimer: This article contains sponsored marketing content. It is intended for promotional purposes and should not be considered as an endorsement or recommendation by our website. Readers are encouraged to conduct their own research and exercise their own judgment before making any decisions based on the information provided in this article.
