Payday loans or cash advance loans are like smoking or any other bad habit – you know they take away from your well-being, yet you cannot live without them. This is what most knowledgeable people in areas of personal credit and finance say. It is true that are very expensive once they are converted to the traditional loan metric, and feature many other drawbacks, such as short borrowing terms and small loan amounts. All combined, such negative criticism should have pushed cash advance loans off the lending market.
Payday Loans Popularity Is On the Rise
Well, life proves them all wrong: payday loans are widely offered and are very popular. In fact, they have two major competitive advantages that other lending products do not feature: they are available to almost everybody, as they do not feature credit checks as a part of the approval procedure, and they offer immediate funding – borrowers are often able to get cash right on the spot, or have the funds transferred to their bank account in a couple of hours. These two alone offset all disadvantages described earlier.
Who Should Consider Payday Loans
Several years ago many people with good credit may have their eyebrows move up should they hear about using payday loan services. Today, when banks have tightened their lending criteria while nationwide credit quality decreased greatly due to real estate market collapse and massive unemployment, many previous good credit borrowers find themselves in the position where their savings are drained and credit scores have taken a serious hit. Very often, a payday loan is the only financing they may be able to get, that is guaranteed. The nature of payday loan does not mean that it is only geared towards people with bad credit. Everybody who experiences temporary cash flow problems may benefit from payday loan services, regardless of their credit rating.