Instant payday loans! What a grand idea! Am I running short of cash for this month? Yes, no problem, let me just get an instant loan to tide me over. It is smart, easy, quick, and hassle free! This is the kind of thinking that usually goes on in one's mind while one is thinking about these loans. However, the real picture is not so rosy. Like any other loans there are various benefits and there are also various negatives associated with it. You need to note and understand both to have a fair idea of what these are all about.
What are Instant Payday Loans?
Let's, first get an idea of what these are all about. If and when a person is facing a financial emergency then he/she thinks about availing an loan. The name itself gives an idea of its nature. Its instant meaning it's quick and is disbursed without wasting any time. Moreover, 'payday' refers to the paycheck that you are going to get from your place of employment at the end of every month. This is what you can call your ticket for the loan. The paycheck that is going to come in your checking account will be the basis on which you will get your payday loan.
The Advantages of Instant Payday Loans
Once you know what these are all about, you will have a fair idea about the advantages offered by these loans. Here are the benefits offered by instant payday loans:
- The maximum amount you can get in this type of loan is $500 in cash. However, if you want the amount in a check then the figure can go up to $1000 but nothing above that
- You will get the loan amount within 24 hours
- There is no credit checks involved in the process and hence the disbursal time frame is shortened by a long way. In many cases within an hour or so after you apply for the loan, the money is deposited in your account.
- Unlike other loans there is no collateral in instant payday loans. The only criterion for somebody who wants an loan is that he/she must have full time employment.
- It really does not matter whether you have good credit or bad. Anyone can get these loans.
- There are a host of companies offering instant payday loans and you don't have to search too hard to find them.
If you understood the concept, you will have a fair idea of their benefits, but if you stretch your practical imagination a little further, you will also have an idea about the disadvantages. Here they are:
- The interest rates are sky-high
- If you fail to pay the full amount along with the various charges and interest rates on or before the due date, you will be slapped with even more charges.
- These are short-term and unsecured loans hence all charges see an increase
- Flat fees charged by almost all payday loans companies.