What is a payday loan and should I rely on payday loans?
Payday loans are a small amount of unsecured and short-term loans. People take a payday loan to utilize the money until the next salary kicks in.
Payday loans are useful to meet any type of financial crisis. The loan quantum depends on your next salary cheque and your total income.
A payday loan is very useful for working professionals. This type of loan needs to be paid within 7 to 60 days depending on loan providers. Payday loans can be used for weddings, medical emergencies, school fees payments, etc. Payday loans are very helpful to manage the financial crunch between your salary cheques.
How do Payday Loans work?
Let’s understand with an example. If you need 50,000 urgently but you are still a few weeks away from your payment date and your bank account is on the verge of being empty.
Then you can go to the payday loan providers. You can apply for a 50,000 rupees payday loan with a tenure of 2 weeks with an interest rate of 10 percent.
You have to repay your total amount with an interest rate within 2 weeks.
Advantages of Payday Loan
Quick and Easy :
You do not have to wait for a long time to avail a payday loan. Payday loans can be disbursed within minutes. Payday loans are very easy to avail of.
Minimum Documentation :
Payday loans do not require any extensive documents. Salaried persons can avail of loans only with a bank account and minimum personal and financial details.
You can easily apply for payday loans online through our website. Visit our website, fill the form, provide required documents and we will provide a payday loan within minutes if you are eligible.
Just like personal loans you can use a payday loan for any type of need – paying school fees, a wedding expense, medical emergencies, travel, buying electronic gadgets, etc.
Disadvantages of Payday Loans:
Very high-interest rates
Interest rates are very high as compared to other types of loans. they are short-term loans hence interest rates may seem manageable. But when we calculate the annual interest rate of payday loans they turn out to be up to 400% APR.
Debt Trap :
It’s very important to pay a loan within your tenure period if you are unable to pay then it may incur huge penalties for you.