Payday loans can be arranged very quickly. This means that it can be tempting to think that they are just there to benefit those that need money quickly. Although they obviously do benefit these people, they also have many other advantages that could benefit others as well.
- Simple to arrange– sometimes arranging a loan can be difficult. You might have to speak to a lender in person, so arrange an appointment and give them all sorts of information. You might have to fill out all sorts of paperwork and things like this. A payday loan is very simple to arrange and can often either be done over the telephone or online. This means that it is not complicated and does not take very long either. Some people hate filling out forms or dread having appointments with a lender and so having a simple process can make things a lot easier.
- No credit check – no credit check is done on those applying for a payday loan. This means that it is a loan which is more accessible to everyone. Many people find that they cannot get loans because of their poor credit record or that they are charged a really high interest rate because of it. Payday loans do not do this – they offer the same rate to anyone regardless of what their credit rating is like as they do not check it. Not only does this mean that loan is available to all but also that it can be arranged more quickly as this check does not have to take place. You do not even have to worry about making sure you credit record is correct or thinking about what it might say.
- Quick to repay – a payday loan does not last long and so it is repaid very quickly. The loan is set up so that you repay it on your next pay day. This means that the loan will not last longer than a few weeks. Some people do not like the idea of a loan hanging around for long and so having one like this, which only lasts a few weeks can be idea. There will be no worry of the debt lasting a long time as it will soon be repaid and gone. It can be nice knowing that by the time you are next paid, the loan will all be paid off and you will no longer have to think about it.
- Just one repayment – most payday loans have just one repayment. This means that the loan will be repaid in a lump sum which includes both the amount borrowed and the interest. It can be easier planning for just one lump sum payment than working out how you can manage regular monthly repayments, which you might have to do with other types of loans. It can be good to know that it will all be repaid quickly. You will just have to budget for the one month, before you repay the loan and then afterwards for the following month as you will have less money to manage on. Once you have done this you will be able to relax and not think about repaying the loan any more.
- Only borrow small amounts – with a payday loan there are limits on how much you can borrow. You can borrow just up to £1,000 although many lenders will lend less. If it is your first time of borrowing with them, they are more likely to lend you less. By limiting how much you can borrow it means that that loan will be easier to manage and you will not be borrowing more than you need. Often, we can be easily tempted to borrow more money than we actually need and this can be problematic. It means that we can end up paying back a lot more in interest than necessary due to borrowing more and we could even find it harder to repay as a result. By limiting what we can have, we are likely to only be able to borrow the amount of money that we need to help. This means that the loan will not be unnecessarily large.
So, as you can see, there are lots of reason why you might consider taking out a payday loan. It is true that they are very quick to arrange and this means that if you need money quickly you will get it with this sort of loan. It can even be possible to have the money within a few hours of applying. However, this is not the only reason that a payday loan could be useful. It could be useful because you can only borrow small amounts for short periods of time, you need no credit check and it is simple and easy to arrange.