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The Advantages and Disadvantages of Payday LoansTo some people, payday loans are literally lifesavers. Without these special loans, a lot of families would surely have problems keeping their heads afloat in today’s treacherous economy. In fact, a lot of Americans would probably have drowned had it not been for these loans.
However, there are also a good number of citizens that believe that these loans are no good. They see cash advance providers as glorified loan sharks out to take advantage of people’s financial worries. There are also a lot of misconceptions about these loans and one of the most daunting ones is the belief that once an individual takes out a cash advance, there’s no getting out. It’s nothing but an endless, vicious cycle that will drag one further down.
Much like any other financial transaction out there, payday loans also has its good points as well as a couple of drawbacks. It is in no way a miraculous answer to all of an individual’s financial problems. In fact, cash advance loans should actually be used only as short-term solutions to a temporary economic crisis. On the other hand, it is also unfair to say that these loans are useless as they have definitely been able to lend a helping hand to a lot of American families.
Perhaps the biggest advantage of the cash advance loan is the convenience it is able to bring. Compared to a typical bank loan, paycheck advances are much easier to acquire. There’s no need to go through a tedious application process which may ultimately end up in failure.
The process of taking out a cash advance is much faster and definitely much easier. Moreover, the approval rate is also much higher as these loans usually don’t look at one’s credit rating or payment history. It is also very convenient in the sense that everything can be done through the internet. What’s so popular today are one-hour online lenders which can literally deliver one’s money within sixty minutes, without having to leave one’s chair.
However, one of the main reasons why a lot of people have such a dislike with payday loans is because they come with much higher interest rates. 30% is usually the industry standard and for a family that’s already struggling financially as it is, this is definitely not a small amount.
In fact, it still wouldn’t be small regardless if one were a millionaire. This is just one of those things that one would have to live with if he chooses to take out a cash advance to augment the family’s financial resources. GP