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Short Term Payday Loans Stigma
11 Sep 2019

Is the Stigma Against Short Term Payday Loans Justified?

No one sets out to live beyond their means However, sometimes your demands can exceed the amount of money you earn. For immediate demands, you have to be proactive and sort them out before they become a huge inconvenience. Take for instance when your house or vehicle needs some repairs and you cannot wait until the next paycheck otherwise the damages will deteriorate. To address such financial emergencies, a loan can act as the much-needed boost before your paycheck arrives. However, this loan option seems to get a bad rap. Is it justified? Let us explore the many reasons why you should not fear taking short term payday loans.

What are Short Term Payday Loans?

They are one of the main loan types you can get from numerous lenders and they act as salary advance until you get the next paycheck. You can access this loan from numerous direct lenders even when you have a poor credit rating. You obviously know how essential your credit score is in accessing financial services such as loans. Traditionally, getting personal loans without a positive credit score might have been complicated. However, for payday loans, lenders have some surety that you will repay when you receive your next paycheck and such security is adequate to guarantee your creditworthiness.

What Makes Short Terms Payday Loans Ideal?

  • Significant cash amounts

Payday loans are reliable sources of financial relief when you need to take care of a huge expense that you had not anticipated. As long as you can prove that your income is enough to repay the loan you take, some lenders are willing to loan you even up to £2000.

  • Instant processing and approval

When you have a financial emergency, payday loans are the best option because their approval is quick. As soon as you have been approved, the money is deposited in your bank account for you to take care of the problem at hand. Normally, you can get the money within the same business day.

  • Few requirements

As opposed to numerous other loans, payday loans may only require you to be creditworthy or have an ability to afford the amount you apply for. The few roadblocks allow you to have an easy time accessing such loans.

  • Apply even when you don’t have a job

As long as you have some provable income coming in some lenders will be willing to give you this loan. The income does not have to be from employment as it can be from other sources like pensions or government benefits.

  • Accessible without a checking account

Checking accounts enhance convenience between you and the lender for both deposition and withdrawal of the cash. However, you can find some lenders who can offer you the loan even without the said bank accounts.

  • An opportunity to improve your credit rating

When you successfully repay your payday loan on time, the lender makes a positive report. The report helps to better your credit score improving your access to other loans in future.

Although these loan options are great short terms solutions, your main agenda should be to gradually improve your credit rating and build up your savings so you do not have to find yourself in the same situation every month.

How to Make a Prudent Decision

Due to the ease associated with accessing these short term payday loans, sometimes you might be tempted to make a rash decision. This can lead to regrets later and as such, you should make the following considerations to be on the safe side:

  • Only borrow when you absolutely need the money

Just because you can borrow does not mean you rush to get a loan to buy a luxurious item that you don’t even need.

  • Compare several lenders and their rates

Lenders have numerous differences especially in terms of rates and you should aim to get the most affordable loan.

  • Only borrow the amount you need and can afford to repay

This allows you to avoid getting trapped in a vicious loan cycle which compromises your credit ranking.

  • Check the lender’s legitimacy and reputation

Ensure that the lender is licensed and that they have a credible reputation amongst their past borrowers. Some unscrupulous lenders might want to trap and enslave you through continuous loans and you have to be wary.

Whenever you have a financial hurdle, short term payday loans can quickly bail you out. However, with numerous lenders being available, it is important to compare their rates and also verify their reputation. Bonsai Finance connects you with numerous genuine lenders for you to compare and choose the best short term payday loans. With an easy online application process, you can get a loan from the comfort of your home.

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