Payday loan is a type of unsecured loan which is taken by an individual for short term and interest rate on this type of loan is usually very high as compared to other form of borrowings. These are also referred as cash advances, given below are the payday loans benefits –
- The biggest benefit of this is that it can be taken without any security and therefore it is best suited for those people who do not have the assets which they can mortgage and also have poor credit history because when one compares it to financial institutions or banks one will find that these institutions require security before they can grant loan to the borrower.
- When an individual required funds for emergency this is the best option because one can get this loan very quickly as compared to other form of borrowing where one has to fulfill various requirements before getting the credit.
- Banks or financial institutions give credit for specific purpose like housing, starting own business, car etc…, only whereas payday loan can be taken for any purpose like for paying medical bills, utility bills, marriage related expenses and meeting other such day to day expenses.
- If a person requires small amount say $500 then it not feasible option to go for traditional sources of borrowing and therefore when the amount involved is small payday loans are ideal.
However an individual should be careful before taking this type of borrowing because rates of interest are very high for payday loans and if one is not able to repay it on time it can lead to disastrous consequences.