We won’t sugarcoat it, payday loans are not the most loved loans, they get a bad rap and have a reputation for being expensive, and a type of loan that will often have you spiraling into debt.
We admit, they are not the best loan, and yes, they do come with risks, but it’s not all bad, there is a silver lining to everything, even payday loans. In fact, if you pay them off quickly, they can be pretty beneficial for building credit.
Loan places like speedy cash no matter what type of loan it is, obviously though, with payday loans it is not just good for the lender, but it is good for you as well, to be paying off the loan as quickly as you can.
Payday loans are made to help borrowers cope with short-term financial shortages until they get their next pay, however, payday loan as a phrase actually covers a wider range of loans than it used to.
This means that our typical negative association is not totally representative of what payday loans are now. They have changed now, and things are different.
Okay, these loans are not ideal for everyone, and if you are really strapped for cash we still don’t recommend that you go taking this type of loan out anyway, in fact, if you are really strapped for cash, it is better to start budgeting and finding a way to financial freedom, a loan won’t do much long term good.
So, what are the advantages of this type of loan?
Are There Advantages For Payday Loans?
To get right to the point, yes, there are, although they may not always be easy to see. Sometimes we tend to focus only on the bad things, but remember that everything has a positive side, or it would not exist.
These loans are designed for a short period of time for those who need quick cash, and don’t mind a higher interest rate in order to get it.
What Are The Advantages?
So, what are these advantages? Well, there are plenty but let’s focus on five of the most important ones.
These advantages are not always plainly obvious, but they are there, and these are the reasons why people do take out payday loans, even though they do come with some associated risk.
#1. Easy Access
Probably one of the most appealing things about payday loans is that they are easy to get access to, making them really convenient. They are unlike a lot of conventional loans, as you can simply apply for these online in mere minutes.
Your money can get to you on the same day as well, which is exactly what some people are looking for when they consider taking out a payday loan.
These loans are often taken out at short notice as a means to cover unexpected costs that come their way, be it a hospital bill, home repairs, or to get their car fixed.
#2. You Could Save Money
While we do note that they can be risky financially, they can also save you money as well.
By taking out a form of finance to cover expenses you cannot otherwise afford, you might actually save yourself some cash. However, this is dependent on the potential factor that you can repay the loan.
Say you were going to miss a credit card payment, or you have gone too deep into your overdraft, paying these off could save you some nasty financial consequences. However, only do this if you can repay the payday loan.
This is subjective to you and your financial situation, but while these types of loans can be risky, they can also be useful if you are financially responsible.
#3. Early Repayments Which Can Reduce Costs
Let’s not forget that with a great deal of loans you can find yourself trapped by early repayment fees. However, with payday loans this is rarely the case.
However, luckily for us, with modern technology having grown so much, a majority of lenders now send reminders for payments through email, or by texting you.
This is useful, because even if your life is chaotic, you will get a reminder letting you know you have to pay your loan back.
It is useful to help you make sure that you have enough money in your account to cover any automated payments. Some lenders will also let you make early payments, if you want to do this, always ask and make sure this is okay with the lender first.
It can help to reduce overall payments.
#4. It’s Easy To Manage
Thanks to the internet (once again) and online use, everything is done online and from the comforts of your own home now. This means that there are a vast majority of us who choose to manage what we borrow from online lenders.
Payday loans are one of the loan types that are often managed online, and it does make them much easier to control and manage.
When you apply for your payday loan, you will usually get an online account, and when you log into this you will see the balance, and dates for repayment, as well as options to make payments.
Managing your loan repayments online makes it so easy, and if you can make early repayments, this makes it even easier to do so.
#5. Its Unsecured
Finally, let’s remember that payday loans are one of the loan types that are unsecured. So, with a poor credit history you can get an approval for this type of loan without risking any of your possessions in the form of collateral.
Some high street lenders will require collateral in the form of your car, home, family heirlooms etc. in case you default on payments.
Payday loans might have a high interest rate, but they do not require collateral, so even if you do end up in the deep end of your payment, you are not putting your property on the line.