Explore the pro and cons of payday loans

Payday loans have become really popular nowadays with more and more companies offering this service. But what are the advantages and disadvantages of this service? In this article we will be having a look at the pro and cons of payday loans.

Pros

Easy availability

The first advantage of payday loans is that it is easy to obtain. The only thing that will be required from you is a proof of employment and a proof of your income. If you satisfied these two requirements chances are high that you will be going home with your much needed cash.

Paperwork

Another benefit of these types of loans is that they do not require a lot of paperwork. All that is required is you contact detail as well as banking details and you are on your way for your loan. Usually your loan should be approved within one hour or so.

Available for poor credit

If you have a poor credit rating, then payday loans maybe the only situation for you. Most of the time payday loans companies do not check the credit rating and will gladly provide you with the necessary money as soon as you need them.

Cons

Expensive

Payday loans are expensive. This is perfectly normal given the fact that payday loans are meant only for short-term. The more time you are going to take the more interest you will have to pay and you may end up having to pay more than the loan. Make sure that you can repay the loan within the set time period if you do not want to lose money.

Hidden terms

Sometimes the companies offering Payday loans are not clear when it comes to their terms and conditions. There might be some hidden terms and conditions that may cause you to lose more money than you gain from these loans. Make sure you read the contract well and that you ask questions when you are unsure.

No long term fix

Although a payday loan can be useful during a crisis, it is by no means a long term solution. You will need to find some ways to raise more money for the future if you want to avoid these situations. Usually payday loans are available only for 2 weeks and it is better that you look for long term financing to avoid this problem in the future.