Traditional Payday Loan that is also known as “Cash Advance”
is a loan that will be repaid by the borrower on or before the next payday. But today, repayment of a payday loan may not always be directly tied to borrower’s actual payday.
All payday loans have in common:
- Short-term. Unlike an installment loan that consists multiple payments, payday loans usually have just single payment.
- Unsecured. Borrowers don’t need to offer collateral to take out payday loan. Unsecured lending is riskier for the lender, and because of that, unsecured loans are usually for lower amounts and have higher interest.
- Relatively Smaller. Since they are shorter and unsecured, payday loans are usually for smaller amounts than other types of loans. They are designed to help you deal with your immediate financial difficulties while being small enough to pay back quickly.
Like all short-term loans, payday loans are more likely to be used for emergency financial needs. These includes:
- Paying urgent bills
- Avoiding overdraft fees
- Preventing checks for bouncin
- Hospital emergencies
The common characteristic of these 4 examples is their urgency. Payday loans are just temporary solution to a short-term financial problem. It is not a solution for long-term money issues.
With the existence of internet nowadays, transactions online in connection to payday loans are also available.
Payday loans online are something that is supposed to be taken when cash is needed urgently in some unexpected emergency situation. These loans do not presuppose long-term repayment neither do they have any strict requirements to the borrowers.
Payday loans online are meant to help people in the situation of cash shortfall. This is a very convenient lending option especially for borrowers who has good credit standing and who are not actually able to rely on a regular bank loan.
These loans can be acquired in a matter of 24 hours and the only thing that a person needs to provide are the proofs of checking account and income as well as identity and employment. Compared to bank procedures, payday loans are fast and easy and they do represent a very convenient option for many borrowers.
One of the main advantages of online payday loans is that, there is no need for the client to visit the bank personally. There is an online application form that is easy to submit.
Consequently, the approval just takes a little time. Generally, the money will be deposited to the borrower’s checking account within 24 hours. This is extremely convenient when the borrower has no time to travel, less paperwork and banking hassle.
The repayment process also takes little time and effort. The total loan amount will be withdrawn form the borrower’s account on a due day together with the interest rate. In case the borrower is unable to repay the full amount on time, an option to repay the interest will be offered, and the loan term will be adjusted.
Payday loan is very convenient since it has an easy processing procedure and the terms offered by the lenders are frequently more acceptable for many clients than the ones that being offered in the banks. This makes payday loan the easiest and fastest lending option now available.