Now here’s a financial industry that has been doing rather well considering we are in a middle of an economical crisis all around the world, but especially in Europe and Americas. Sometimes you’re just a hundred or two hundred euros away from covering all of your outstanding loans and bills, and picking up a regular banking loan is a big pain in the behind. With documents needing to be processed, your credit ratings needing to be addressed and several interviews to be had, picking up a loan is just not worth the time. In some better days, you could have turned to your friends and family for financial aid and support, just to weather out the storm, but this crisis has hit the pockets of all people and often you will not find much help that way.
That’s where payday loans kick in. This industry has literally boomed in the UK over the last decade or so, and it’s spread from there to Europe and Americas. Small loan companies with much fewer restraints when it comes to loaning money, they are allowed to borrow out smaller sums and to do it swiftly and efficiently. This is a first thing to remember when it comes to payday loan companies – you’re not likely to pick up a loan to buy a car or pay for your house here, these are much smaller loans meant to help you cover an expense for a week or two until your salary comes in. That’s how these loans are paid back, directly from your salary, which means you have to have a job if you want to pick up a payday loan. Recently, even people without salary but on benefits have been given the option of picking up a quick loan, but that’s a story for itself.
Well, are payday loans good or bad for you? Most likely bad, like any form of loan you have to pick up, but they may become necessary for you at one point or another so it’s best that you know their pros and cons beforetime.
Quick approval – You can pick up a payday loan in just a few hours, in fact, you should spend more time actually looking for a loan company with terms that you find appropriate than actually dealing with the red tape. In fact, most of popular payday loan business have started offering their services online, you can do everything from your home with no need for interviews and things like that.
Easy process – Picking up a regular loan includes managing your credit score, waiting for the bank to figure out if you’ve got other outstanding loans with other banks and things like that – all avoided when you’re dealing with a payday loan company.
Very high interest rates – this is one of the biggest drawbacks of payday loans, and one you should pay most attention to. Even if you pay back this kind of loan right on time, you’ll still be paying interest rate that is at least half again what you’d pay for a loan in a regular bank. Being late doesn’t pay at all, most deals with payday loan companies include interest rates of 30%+ if you start lagging behind with your payments. Yes, you borrow a reasonable sum of money, but you can still pay a huge interest on it, not economically viable at all if you’re not careful with your money.