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By Contributing Author,
Being Truthful – the Pros and Cons of Taking Out Payday Loans
If you’re living in the twenty-first century with the rest of us, chances are you’ll have heard of the expression “payday loans”. The only issue with not knowing much about them is that more often than not they’re demonized by the media and public alike. Although there are cases of fraudulent and untrustworthy payday lenders out there, there are organizations that are there to help, and do exactly what they advertise. As with anything, there are positives and negatives to taking out a payday loan, so today, we’re going to be as truthful as we possibly can in exploring this.
Pro: Their Requirements are Minimal
Let us start off on a positive note, and look at one of the pros of payday loans.
Say you were looking to apply for online payday loans in Canada. One of the biggest positives to financial loans in comparison to other types of lending, is that their requirements are so minimal. With many lenders, you have to provide all sorts of documents, including a credit report where they can analyse whether or not your score is good enough in order for them to approve you for the loan. When it comes to payday loans, all they’ll require of you is the following:
- An ID or Social Security number.
- That you’re eighteen years of age or more.
- Have a bank account that’s currently active.
- Proof that you have a job, or at the very least a regular income.
So long as you have these things, you’re extremely likely to be approved.
Con: Some Companies can be Considered Predatory
Next up, a con.
Unfortunately, many payday loans out there are considered to be predatory. These companies are the untrustworthy and deceptive ones that we were talking about earlier on. They’ll often unfairly use their position to manipulate the borrower into paying more than they can afford, and will ultimately be able to trap them in an ongoing cycle of debt. It’s these companies that give payday loans such a bad name, so always be vigilant when searching for the organisation you want to go through. It’s very easy to be duped – but if something seems too good to be true, chances are it probably is.
If you can, make sure the loan you’re taking out can help to build your credit score. This can be an immediate tell tale sign on whether a company really wants to help you out, or not.
Pro: They’re Quick to Pay Out, and Easy to Apply for
When it comes to positives, this is arguably the most important one. They pay you quickly, and they’re super easy to apply for.
Sure, we talked about how few requirements there are when it comes to applying for a payday loan, but we didn’t discuss just how easy they are to apply for, and how quickly the cash can be in your account.
A lot of the time, applications can be done online – as with most things nowadays! These applications can take as little as ten minutes to complete and send off, then the money is likely to be in your account in as little as twenty four hours – or in some cases, even on the same day. In an emergency situation where you need a little financial help, it’s hard to find any that’s as quick and convenient as this.
Con: It’s Easy to Become Trapped in a Cycle of Debt
One of the biggest cons of payday loans, is just how easy it is to become trapped in a cycle of debt with them.
Because they’re so easy to apply for, regardless of a person’s financial situation, they’re possible to take out. This means it’s equally easy to rollover the debt, and for it to mount up over the months. This is one of the reasons that payday loans get the negative press that they do – so only use them, if you can afford to pay them off ASAP. We can’t stress that enough.
Pro: They Won’t Check Your Credit Score
It’s always good to finish on a positive note, and this one is that they won’t check your credit score.
Credit scores can be negative for all sorts of reasons, and it’s not always necessarily your own fault. In this respect, payday loans give everyone an equal opportunity to borrow money in an emergency.
Be mindful, do your research, and weigh up your options.