It’s rightly said that life is a rollercoaster ride, and the unexpected twists and turns can pop up at any time. Sometimes those instances result in unanticipated expenses that can place a short term strain on a household’s cash flow. Options are available to the general public to deal with financial uncertainties.
Payday loans are one such provision to meet the short term obligations. While the interest rate is high, these loans can be a tool to fill a short-term gap. While the option of payday loans may seem attractive, they need to be approached with some caution. Here we have compiled both the benefits and the risks of payday loans to give you a clear picture.
What Are Payday Loans?
Concisely speaking, payday loans are short-term high-interest loans. The borrowing amount ranges typically between $1000- $5000; they can go as high as $10,000. The paying tenure is between 16 days to 1 year based on the amount, paying capacity, and a range of other contributory factors.
Pros Of Payday loans
In situations that you cannot shoulder immediately like an unexpected medical emergency, payday loans can be beneficial. Given below are some of the pros of payday loans:
Instant cash: While banks require a lot of documentation and processing time for a loan, you can receive the money the same day with payday loans.
Ease of payments: Payday loans are effortless to settle too. The payment is automatically deducted from your salary account on your paydays or an agreed-upon date.
Cons Of Payday Loans
While your immediate obligations may be covered with a Payday loan, new debt is added. This debt can be scarier because of the relatively short time required for repayment. Some of the cons associated with a Payday loan are:
High-interest rates: While the interest rates on bank loans are nominal, with Payday loans, the rate of interest is generally very high. These high rates can dig a deeper hole in your pocket.
Minimal timeframe: Unlike other loans, where you are involved in the repayment time frame, with payday loans, the decision for repayment lies in the hands of the granting authority. This short time frame can be stressful and may exert a heavy toll if your earnings are uncertain.
A Great Temporary Financial Solution for Some
Overall, Payday loans are associated with both pros and cons. Ultimately, it’s your decision and the urgency of the situation you must consider before applying for the loan.
If you are struggling to get a quick loan from a bank or are stuck due to bank loan fees, we can help. Cash Fast Loan Center offers Payday loans to help you smoothly sail through the storms of life. Find the Cash Fast Loan Center near you.