While many people turn to banks when they need a loan, only a small percentage actually get approved. If you ever find yourself in need of money for any reason, you will definitely want to explore all of your options. Going through a bank for a loan is really not the best option in most cases. In this article we will lay out all the various benefits of payday loans so you know what they have to offer. You don’t want to make a borrowing decision until you get this information.
- You Will Get Your Money Faster
Banks can take days if not weeks to disperse funds to approved applicants. If you cannot afford to wait a long time because you have an important expense, a payday loan is the better option. The average payday loan pays out within 24 hours, so you can get your expense taken care of without any unnecessary delay.
- You Can Get Approved Even with Bad Credit
Bad credit tends to be a major problem for people who apply for a loan through a bank. Most private lenders that give out payday loans won’t be nearly as critical. You can have very bad credit or no credit history at all and still get approved. In fact, this is one of the biggest reasons why payday loans have become as popular as they are today. If you keep getting denied by your bank for a loan due to bad credit, you’ll want to explore this option.
- You Can Borrow Different Amounts
Payday loans allow you to borrow anywhere from $50 to over $500. Bank loans are typically for $1,000 or more, which can be quite limiting. Those who don’t need to borrow a lot of money will find that this is a great solution. Make sure that you find out what limits if any your state sets on borrowing amounts for payday loans.
- You’ll Pay Less Interest
Not everyone who gets a payday loan spends less on interest than with a bank loan, but the short terms help you save money. The shorter your loan’s payback period is, the less interest you will end up paying. Long bank loan terms mean paying more over the course of the loan, which is the last thing you want.
- Superior Customer Service
A lot of banks are notorious for their abysmal customer service, but private lenders tend to really take care of their borrowers. This obviously depends on the lending company you choose, but many of them offer great customer support. You will typically have a phone number and email you can use to contact a representative. Some of these private lending companies even have a live chat feature on their website that is available 24/7.
- It is More Convenient
The process of obtaining a payday loan is far more convenient and expedient than a bank loan. You will be able to apply right on the lender’s website, and it only takes around 15 minutes or so. This will save you a lot of time, which is always a good thing. Bank loans sometimes require you to fill out paper applications in person. This can be a very tedious and time consuming process to say the least.
- No Questions Asked
Unlike bank loans, private lenders that give out payday loans won’t ask you what you want to use the money for. You won’t be limited with regards to how you spend the funds, which can make it a lot easier to get approved.
- No Collateral Needed
Payday loans are completely unsecured, which means that you won’t have to put up any collateral. This is why these loans are so low risk and attractive to many people.
- Flexible Terms
The flexible terms that come with payday loans make it easier to repay the money you borrow. Most private lenders are willing to work with you to a certain degree. Banks on the other hand are usually very strict when it comes to repayment schedules.
- Fixed Interest Rate
Interest rates for payday loans are almost always fixed, which means they stay the same for the entire duration of the loan. Bank loans can come with variable rates, which means irregular payments that are unpredictable and difficult to budget for.
There are lots of reasons why you should think seriously about getting a payday loan over a bank loan. The fact is that an increasing number of people are starting to apply with private lenders because of the many benefits their loans offer. If you are currently in need of money, you should take some time to look into this option. You could end up getting exactly what you need to take care of whatever expense you have at the moment.