Instant payday loans are short term loans that are beneficial for the consumers who require cash urgently before the arrival of the next paycheck. In order to avoid the exigent repayment terms they continuously take out new loan and get into vicious cycle of debt. If you are struggling to pay off your multiple payday loan debts then you can take payday loan consolidation help to manage your financial situation. Therefore, before you take out a payday loan it is advisable to check the advantages and disadvantages of payday loan.
Benefits of payday loan:
1. The borrower can get access to instant cash within application of 24 hours. The cash will be deposited in your account within a single day’s notice.
2. The borrowers do not undergo credit check so consumers with poor credit can also apply for this loan to manage their emergency expenses.
3. The eligibility criteria for applying for payday loan is simple as you are required to have a stable income along with American citizenship and should be 18 years above. If you fulfill the qualification criteria then you can easily apply for the loan.
4. The paper works involved while applying for instant payday loan is simple. You are required to disclose a few personal details for instance your name, address along with information about your current and active bank account.
Drawbacks of payday loan:
1. The payday loan amount is small that might usually in range of $500 to $1000. Therefore, you can take only take out this loan to manage your sudden urgent expenses at the middle of the month. You cannot take out this loan to pay off your debts as the amount will be too small to use for the purpose of eliminating your debt.
2. The APR charges are too high so if you are unable to pay back within 14 days then the accruing interest on the principal balance will make it unaffordable to pay off.
3. Make sure you choose a reliable lender who does not take upfront fee or charge unreasonable interest rate. So you need to shop for an authentic payday lender to get the best deal.
4. The lending law varies from state to state so you need to be careful before applying for a payday loan. Therefore, you should apply for a payday from a registered lending company so that you can avoid illegal activities.
So these are a few advantages and disadvantages of payday loan. Make sure that you keep the above mentioned points in mind before opting for a payday loan.