Guaranteed payday loans have been around for some time now and they have been used by a lot of people in order to take care of their immediate cash problems.
So Quick To Get
One of the reasons why people look towards payday loans as a good solution to the cash problems is because of the speed that it can be processed with. It is possible to get the same day approval on your loan application. With online loans that are available now, the processing could be as fast as 1 hour. No other loan could be as quick.
No Documents, No Faxing Necessary
Another reason why people flock towards it is the fact that it requires no documents when it comes to the application, it can also be a faxless transaction. For the online loans that are available now, all you have to do is to fill out an online application form and provide all of the necessary details. The loan lenders could come to a decision as to approve or deny your application and most of the time they approve it.
Disadvantages of Online Loans
Before you become excited about getting guaranteed payday loans, however, you should realize something about it. There are some negative things about the loan. Though it can be beneficial if used properly, it can seriously hurt someone financially if handled in the wrong way. The problem is made more acute by the fact that those who turn to it are the ones who are most financially vulnerable. Those who have low income or are earning the minimum wage.
Here are some reasons why you ought to steer clear of loans from payday companies:
The interest rate that you get for payday loans are exorbitant. There are instances where the annual interest rate of a loan could be as high as 300%! That’s no joke. You don’t think that it is that much since the usual period is short, a week or two perhaps. You can feel the pinch once you start extending the loan.
Guaranteed Payday Loans Easy to Get
The ease of which you can get this loan type is another sobering reason why you ought to avoid it. You always hear it being praised as a good thing, why is it so bad? Because it makes it easy for you to be trapped in a cycle of borrowing money and using up your pay check even before you get it. In other words it can lead you to a pitfall.
They don’t check your credit score when you’re applying for a guaranteed loans from payday companies, but what they fail to tell you is that the kind of loan that you get has some impact on your credit score as well. Loans from payday companies can pull it down. Not by much but if you get it often enough, then you can bet that it would pull it down.
Alternatives to Payday Loans
There are other means that you can get your money or at least resolve your financial issue. Getting loans from payday companies is the easy way out that has some serious consequences later on. Think of other means first and only turn to it when nothing else would work.
These are just some of the reasons why you ought to stay clear of loans from payday companies. These should serve as food for thought for you.