Even though at one point in time, they were highly appreciated since they were all ears to a financial cry for help being quick solutions to one’s cash crunch problems, they are now unfortunately not as well appreciated since their interest rates are higher than regular loans; as a matter of fact, people look for new and improved offerings in all fields, which is completely normal.
However, this has caused payday loans to get a bad name in the lending market therefore causing a heavy reduction in its demand.
Are Payday Loans Really That Bad?
The idea of a payday loan is to offer money immediately to borrowers who need it, and get repaid on their next consecutive pay date- a fair deal, isn’t it? Agreed, payday loans come with a rate of interest that’s higher than that of regular loans. However, if you choose the right lender, we assure you that their rates will without a doubt be displayed on their website. If those rates are convenient for you to repay when the time comes to do so, which is along with your loan’s amount, why should it be difficult for you to repay your loan?
Of course, there are individuals who get stuck in debt cycles if they fail to repay their loan with their own money and then need to take another loan to compensate for the first, which continues to happen. However, if the right steps and precautions are taken before one applies for a payday loan, all the negativity that comes along with it can be avoided, and very conveniently.
Here Is How You Can Avoid the Disadvantages That Come with Payday Loans
- First and foremost, apply for a loan only and only with a trusted source. It isn’t rocket science to figure out whether or not a payday loan lender is a legitimate one or not. Firstly, have a look at their website- if it is a well-made one, lists the rates of interest and doesn’t ask for any kind of fee prior to repayment, it is in most likelihood a legitimate lender. To be doubly safe, find out how good and secure their transactions and encryption methods are in order to avoid your documents from getting leaked.
- Do not apply with a third-party lender; these lenders have no fixed rate of interest and may differ depending upon their lending partners. If you choose to apply for a loan with them, it’s like hitting the axe on your own leg since you may get approved by a lender whose interest rates may be soaring as compared to many others.
Payday Loan Lenders Also Offer Installment Loans
Yes that’s right. Due to the difficulty of repayment that payday loans come with for most people, direct lenders have now started offering installment loans that come with the same benefits as those of payday loans, similar rates but slightly more flexible terms of repayment.
Since these installment loans can be repaid in parts over the course of a few months, it becomes slightly less heavy on the pocket when it comes to repayment as compared to what happens with payday loans wherein one has to repay their loan in lump-sum.
The benefits that these loans come with are similar to those that payday loans have to offer, such as quick funding solutions, easy documentation and basic forms. Also, even these loans are offered online which makes it very convenient for busy people to apply.