The United States is slowly, but surely recovering from the depressing global economic meltdown of 2008. Despite major efforts to build a stronger and secure nation by both private and public sectors, a large majority of people are still strapped for cash. Although economic turmoil and shaky job markets are fading, most of us are still living on a paycheck-to-paycheck basis.
Americans used to heavily rely on their credit line for unwanted, but urgent emergency situations. But with fast accumulation of unpaid bills, it becomes rather impossible for anyone to borrow money from financial institutions such as banks and credit unions. Due to bad credit or simply the lack of employment, consumers are often rejected for personal loans from banks. However, there is a lending product which had made it relatively easier for consumers to breathe a little easier during times of financial distress. Payday loans are small, short-term loans that offer immediate funding. It has been around for decades now, but it was not until recently that the demand for payday loans increased dramatically. Due to great demand, the payday loan application is now made easier and hassle-free to provide maximum benefits to its clientele.
Reasons to Apply for a Payday Loan
Competitive Interest Rates
One great misconception about payday loans is that borrowers are deemed to pay exorbitant fees and soaring high interest rates in exchange for easy cash. Payday loan lenders strictly abide by usury laws that were formulated by the federal government. These guidelines serve the purpose of protecting consumers from a vicious cycle of debt. The most reputable of payday loan lenders adhere to these laws and impose competitive rates instead. Of course, there are lenders who simply ignore regulations and place interest rates up to 900% APR for a one-week loan. In order to avoid such illegal practices, make sure to exclusively rely on previous lenders or those who have had good feedback from past and present borrowers.
Borrow Money even with Bad Credit
This is yet one of the many perks that encourage a lot of people to apply for payday loans, with unemployment rates and lay-offs at an all-time high, financial obligations such as payment for credit card debts, mortgages, and auto loans are late, or worse, not paid at all. The credit score of majority of Americans are compromised due to these unwanted situations. One great disadvantage of low credit scores is the inability to be granted even a small personal loan by banks.
Payday loans appeal to people with bad credit as lenders provide the opportunity for them to apply and get approved for a small cash amount loan. There are no credit checks that which also provides the benefit of a faster and more efficient application process.