A payday loan generally is a dollar loan of around $100- $1500. This loan has a two-week term and is due in a single lump-sum payment on the next payday. Here are some synonyms of payday loans that you might be familiar with:
● Paycheck advance
● Cash advance
● Deferred deposit transactions
● Short term loan
● Bad credit loan
● Payday advance loan
● Fast loan or cash cash
Advantages of payday loans
● Accessibility: One of the key advantages of these loans is that they are easy to access. Advance pay loan lenders generally lend cash within 24 hours.
● Fewer requirements: traditional loans require social security numbers and a lot of paperwork and therefore a lot of people are not able to qualify for loans. Payday loans on the other hand have fewer requirements. Here are the requirements of payday loans:
○ One of should be above 18 years of age
○ You must have a regular income
○ You should have a social security number or an id issued by the government
○ You must have an active bank account
● Lenders don’t check credit: Advance payday loan lenders don’t check the credibility of the borrower. These loans do not require the borrower to have a credit history.
● They are unsecured loans: Payday loans are unsecured loans which means that they are not secured by personal property. This basically means that in case of default the lender will not seize the property of the borrower.
Disadvantages of payday loans
● They are expensive: cash loan paydays are expensive, they have a high rate of interest ( average of 400%). Personal loans on the other hand charge just 4% to 36% interest and the credit card rates are just 12% to 30%.
● They are predatory: Payday loans are considered misleading, unfair and unaffordable. They might trap the borrowers in the vicious circle of debt. They are considered predatory because their cost might rise quickly.
Payday loans are undoubtedly the quickest way of getting cash, all you have to do is to fill a small application form and you will get the money you will need in a short period.