A PAYDAY LOAN can be defined as a small amount of cash with a relatively high interest lent to individuals with the agreement that the borrower repay the same as soon the borrower’s paycheck is received. For some however there is really no definitive description of what a payday loan is except that it is short term high cost loan. The loan is normally repaid in a single payment and is due two to four weeks from the release of the loan. Payday loan is at times secured by a post dated check for the same loan amount issued by the borrower to the lender or in some cases provide the lender the authority to withdraw funds from the borrower’s bank account and/or credit union. Payday loan can be a life saver especially at times when an unexpected expense suddenly arises. They are easy to apply for and hardly require any documentation from the borrower.
Advantages of Payday Loan
BORROWING via payday loan can be very convenient because it is very accessible to individuals who are cash strapped. People who avail of this type of loan need only to fill up a very simple application form and its approval is almost immediate. Collateral is never a problem considering that a person only need to issue a post dated or provide authority to the lender to have access to the borrower’s forthcoming cash funds. Payday loan only takes a few hours or less to be approved so a loan applicant can get hold of the needed cash in just a matter of hours.
Disadvantages of Payday Loan
The most obvious disadvantage of payday loan is its high interest. This is the reason why it necessary that the loan be immediately repaid upon its maturity. Another is that this type of loan is never ideal to cover long term financial problems. The loan is only suitable for urgent financial problems that need immediate financial solution. Always remember that prior to getting this kind of a loan carefully and thoroughly evaluate your financial problem first to see whether payday is the right way to solve your financial crisis.