Payday loan: Pros and Cons

A payday loan can be an effective solution to solve short-term financial problems. But this type of loan has its own features. And these features are definitely worth to pay attention.

Cons

  1. Higher loan rate. Payday loans APR may exceed 1000%.
  2. You can use for a limited number of needs. The loan amount is relatively small. You should not use payday loans for large purchases.
  3. It is a short term loan. You can rollover your payday loan, but in some States the number of rollovers is limited. Do not plan long needs with short borrowings! It is better to use other sources of credit for long-term needs.
  4. Payday loans are prohibited or limited in some States, so they are unavailable for locals.
  5. Borrowers have to pass a qualification.

Pros

  1. It is fast. You can get money in few hours.
  2. You can apply online. You can apply to several lenders at once with some websites and get money even quicker compared to payday loan offices.
  3. You don’t need to wait for the release of the credit card or pledge estimation or completion of any other extra actions.
  4. No need for pledge or any other third party guarantees.
  5. Qualifying for a short term loan is easier than qualifying for other forms of credit. There are the basic qualifications associated with obtaining a short term cash loan.