Specific Advantages of Payday Loans over Typical Loans A payday loan is one of your best options if you need money ASAP for an emergency. It allows you to take care of any expenses that must be immediately covered before your next salary arrives. With this loan being payable with your next paycheck, you don’t have to worry about penalties for late payments. Payday loans have so many advantages when compared to typical loans, but below are the most crucial: Speed of Transaction it takes a while for conventional loans to be granted by the lender. Normally, you will need to wait a few weeks to receive the funds, which isn’t good if you need the money immediately. Additionally, there is no assurance that you will be given the loan. After you submit your application for a payday loan, you will usually be informed within an hour whether it has been approved or not. Some lenders will even give you feedback right then and there. If your application is disapproved, you can immediately approach other potential lenders.
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Payday loans are generally processed on the Internet. You don’t have to have an appointment with a loan officer, and there’s no need to keep calling them just to talk to them about the status of your application. Just send in your application on your website and wait for their response. Less Requirements One of the reasons payday loans can be approved instantly is that there are very few requirements. Mainly, you just need to show that you have a stable and verifiable source of income. A traditional loan, on the other hand, may need you to provide some type of collateral. Surely, this isn’t necessary if you want to apply for a payday loan. You only have to prove to the lender that you are capable of paying off the amount you plan to borrow, and they will oblige. There might be other requirements, but none more complex as establishing permanent residence in your state and that you have an active checking account. Bigger Loan Amount As a new applicant, the amount of money you can borrow will be limited, but this can grow bigger on your future applications as long as consistently make on-time payments. Sometimes, you can even get twice as much on your second loan as you received on your first loan. Credit Card Protection Lastly, a payday loan’s short repayment period may come to you as a disadvantage, but the opposite may be true – it helps you maintain a good credit rating. You are usually given one or two years to repay a traditional loan, and we know that anything can happen within that span of time. You could get sick, lose your job or be in any scenario that makes it extremely difficult, if not impossible, for you to pay your loan off. This how payday loans become an advantage in terms of keeping your credit record clean.