If you’re in a tight financial spot in your life and don’t have the luxury of borrowing money from your family or friends, you may have considered applying for a loan. One of your options for emergency funding is through payday loans – and through alternatives to payday loans. In order to make an informed decision as you’re considering a payday loan, it’s important to know what you’re getting into. Below are some of the pros and cons of payday loans, as well as alternative payday loan options.
What Is a Payday Loan?
Payday loans are unsecured cash advances for a small amount of money, often with high-interest rates, a short-term repayment plan, and penalties if you miss the repayment date. This type of loan can act as a cash advance for the days in between paychecks from your job. While payday loans may be one of the easiest ways to get quick cash, this option for emergency funding may not be the best choice.
Pros of Payday Loans
1. They’re Quick and Easy
Payday loans are typically quick approval loans. Many cash lenders can provide payday loans within 24 hours of application submission; same-day funding may be possible in certain circumstances.
2. High Approval Rates
Large banks typically run credit reports, but payday loans are sometimes easier to obtain than loans through a bank.
3. Unsecured
Payday loans are unsecured cash advances, meaning that they are not secured by your personal property and your lender cannot seize your property if you default, or fail to pay.
Cons of Payday Loans
1. High Interest Rates
Because these loans are short-term and unsecured, they come with higher interest rates.
2. Having to Extend Payments
Each time you extend or rollover your money loans, a payday lender charges additional fees, which increases your costs to borrow money. One loan may lead to another, then lead to another. You may have been able to pay off your loan in two weeks, but rolling your loan over can increase the amount of time it takes for repayment.
3. Fees and Penalties
As mentioned, some payday loans may come with penalties if the loan is not repaid by the due date. Unfortunately, repayment may be delayed or even missed because the total – principal and interest — needs to be paid back in full within a short period of time. Penalties can add up and borrowers can end up paying more than they initially expected when they agreed to borrow the money in the first place.
Payday Loans Online
If you think that high-interest rates, extending payments, and possible fees and penalties are the only cons or drawbacks of payday loans, then you have more to learn. Did you know you might need help finding payday loans online? That’s right. This is because this type of funding is something that may have to be done in person. Leaving your house to get a loan sounds like a con. Instead, it might be best if you look for payday loan alternatives from reputable online direct lenders like MaxLend. With MaxLend, there is no need to leave your house. You can take care of everything online or on the phone.
Alternatives to Payday Loans
Opting for a payday loan may not be your best option when it comes to borrowing cash. There are some other options, such as alternatives like short-term installment loans. Alternative payday loans may have some of the same advantages as payday loans, coupled with a more flexible repayment schedule. Alternative payday loans include, but are not limited to, short-term installment loans, advance loans, and personal loans. You can get a personal loan of up to $3,750 in your account as soon as today from a reputable cash lending company like MaxLend.* For more information on how to obtain cash loans online or to find out if you qualify for a MaxLend loan, contact us today at 877-936-4336. Call us anytime; we’re more than happy to assist you with the information you need in order to obtain emergency funding today.
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*Same Day Funding is available on business days where pre-approval, eSignature of the loan agreement and completion of the confirmation call, if a call is required, have occurred by 11:45 a.m. Eastern Time and a customer elects ACH as payment method. Customers who complete this process by 1:30 p.m. Eastern on business days may still receive funds on the same day, but some banks may not disburse the funds until the next business day. Other restrictions may apply. Certain financial institutions do not support same day funded transactions. When Same Day Funding is not available, funding will occur the next business day.