Payday loans are short-term loans meant to deal with the borrower's urgent expenses that crop up before his next payday. They are at times as well known as cash advance loans and are famous world over with different nations have different laws pertaining to payday loans with the US having the most liberal laws associated with payday loans.
In the last few years, the number of payday loans disbursed in the US has considerably increased, with each year, the number rising by as much as 150%. The benefit that borrowers have with payday loan is that they have no restriction on extending the loan term; in addition, there is no restriction on how you use this money. There is a lot of commotion regarding the very high APR of 1300 to 1500 percent.
However, this high figure does not show the true picture. Even if these loans are increasingly turning out to be popular in the US, they have as well turned into a matter of condemnation. If truth be told, the rising fame of payday loans as well indicates untenable heights of personal debt and troubles cropping up from the financial crisis. On the other hand, lending organizations are making heavy profits on these economic circumstances as growingly people line up for a payday loan.
One major concern though is that these lenders do not talk about their interest rate in their commercials and their only focus is on the loan amount, which can range from $100 to $1500. You should be very cautious regarding all features of getting a payday loan as their accessibility becomes increasingly simple.
Online process for payday loans has made getting these loans quite easy. Of late, you can simply get a fast payday loan over the internet by just filling out a single online loan application form stating your name, age, address, and employment and contact details, along with your checking account details. With very few formalities, no lengthy paperwork and no documents to fax in to the lender's office these loans have turned out to be lifesavers for people suffering from cash shortages.
And since these loans are short term unsecured loans these are free from credit checking and collateral demands from the lender, therefore these are as well available to people with bad credit and as well to non homeowners. The cash is transferred to your account and is debited automatically on your next payday.
Payday loans have been much admired and condemned as well. They have been repeatedly held responsible for exhausting funds for salaried class people, utilizing one's monetary difficulties for profit, forceful marketing and arrears collection methods, disregarding laws and profiting from clients facing economic needs.
There are several different other options to payday loans, like personal loans, cash loans from credit cards, bank overdrafts if you have the facility and several other small consumer loans that offer lower interest rates however they come with stringent conditions. Be extremely cautious while deciding on a choice for yourself and think about all the advantages and disadvantages beforehand.