Everything You Need To Know About Online Payday Loans
Payday loans are the go-to option for many people when they’re cash-strapped and have nowhere else to get quick cash. They are easy to acquire and are therefore very tempting. They also come with hidden charges and high-interest rates.
This article will give you a run-through of everything you need to know about payday loans.
Table of Contents
What Is a Payday Loan?
A payday loan is an unsecured loan typically repaid using the borrower’s next paycheck. It is usually less than $500.
These loans come with excessive interest rates, making them the last option for many borrowers. As a result, most people perceive such organizations as opportunists who take advantage of desperate borrowers.
Pros of Payday Loans
- They can be readily accessed
- Borrowers can quickly meet their eligibility standards
- Borrowers with bad debt records can acquire them
- They are unsecured
Cons of Payday Loans
- They come at high rates
- They’re perceived as predatory since they target low-income individuals
- Some payday loan institutions demand access to their customers’ bank accounts
- Some have hidden fees
How Do Payday Loans Work?
You can get a payday loan through an online application or physical location. Some payday loan
lenders use physical credit checks to assess borrowers’ credit scores, but this is rarely the case.
Typically, the lenders will simply ask for proof of your income and the payment dates.
Both the federal and state governments supervise payday loans operations. Different states have different laws that govern the loan rates charged by payday institutions.
At the same time, other states have banned any payday activity in their jurisdiction.
The following are characteristics of payday loans.
- Loan repaying process: you can provide your lender with a postdated check so that they deposit it on your next payday. Or you can simply give them access to your bank account, and they can automatically credit your account the amount on your next paycheck.
- Credit checks: Most payday loan providers are not concerned about the borrowers’ credit background. In most cases, they ask for your bank access to guarantee that they get back their cash on your next paycheck.
- Fees and other costs: Payday lenders do not have a standard interest rate. They charge borrowers differently based on factors such as their income levels and their payment dates.
If you can’t service your loan on the next paycheck, the lender may provide you with a “rollover.” This allows you only to repay the actual amount that you borrowed until the next payment day.
However, the interest rates of the original amount will continue to pile up until you fully clear your debt.
What’s the Difference Between a Payday Loan and a Personal Loan?
- Personal loan repayment terms cover at least one year. A payday loan, on the other hand, has a shorter repayment period—sometimes required to be returned in a few weeks. The complete payment, including interest and fees, is usually due on your following payday.
- A payday loan is normally for a lower sum—frequently less than $500. In contrast, applicants for personal loans always borrow large amounts of money.
- Personal loans are often repaid monthly online by bank transfer. On the other hand, payday loans allow you to carry your payment term to your next paycheck. If you cannot clear the whole debt on the due date, you’ll incur additional costs in the process.
- Most personal loans have lower interest rates compared to payday loans. Meanwhile, your rate is determined by the lender, the amount borrowed, and your credit history in payday loans.
Is Viva Payday Loan an Alternative?
Viva Payday Loans is a legitimate loan matching service platform that gives any individual the opportunity to submit an online application and have their financial problems sorted the same day after approval.
The application procedure is straightforward and takes a few minutes to complete and get instant payday loans online. Your response will come within a few minutes of submitting your application, notifying you whether you qualify for the loan or not.
When eligible, the money will be transferred to your account within the same day.
Fortunately, even if you have bad credit, are unemployed, are about or on government support, Viva will still connect you with reliable lenders who are always ready to help you.
Don’t Take a Step Before Digesting the Above
Payday loans can be advantageous in the right situation. If you have a good credit history but only need a little more money to meet an expense, a payday loan can be an excellent alternative.
However, keep in mind that payday loans are risky, and if you aren’t sure about your capacity to repay your debt, a payday loan might destroy your credit history.
Before taking out a payday loan, kindly inquire with banks and credit unions about your borrowing alternatives and the best possible rates. The risks of payday loans surpass the advantages, therefore understand their conditions before making an application.
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