There have to be some pretty good benefits to taking payday loans considering their popularity. Yes, there are a number of advantages when it comes to cash advances. When there is an emergency, and immediate money is needed, but the next paycheck is not due for a week, then payday loans save your skin. There is a reason why www.americanbanker.com covers so many articles about payday loans. For those who have never heard of cash advance or payday loans, these are small loans given to people for a short duration. They are so called because they come due when the next paycheck comes in the mail.
There might be many people who know the essential benefits of cash advances over traditional loans. They are quick. The approval rate is high and fast. They give you access to hard money which can be used for anything from mortgage payment to buying medicines. It is their convenience that makes people repeatedly opt for them instead of a bank loan. But there are two benefits of the service that very few people are aware of.
• Your Credit Is Safe
A traditional loan has an extended repayment period. If the payee gets stuck with a bad situation over the years, he will default on the payments. This shot the credit down. Let’s say you get violently ill for some time or lose a job, your means of repaying the bank loan is lost. It affects the credit score. When you compare this to a payday loan, such a situation never arises. A cash advance has to be paid within a few weeks. The probability of an incident occurring that affects your ability to return the payday loan is tiny.
Another way payday loan protects the credit score is while buying a good or service. Studies have proven that when individuals pay using plastic money, they spend heedlessly. We always go beyond the limit, because we have no idea how much we have spent. When we pay cash, we know the very exact amount we have spent and what is left. This makes us budget the money accordingly saving us from a bad score.
• Credit Is Already Bad
Yes, payday loans keep people from getting a bad credit score but, what about those individuals who already have bad credit. A low score equates to no traditional bank loans, but when it comes to cash advances, a lender is not too worried about credit. The main point of contingency for a payday loan lender is your capability to repay the loan. As long as one can give proof of employment and a place of residence, cash advances are approved. There is a chance the credit score may be checked, but final approval is not entirely based on it.
A checking account, a stable job and roof over the head are the most important criteria when it comes to getting a payday loan. If you have the ability to pay the loan back, chances are you will surely be approved for the loan.