Payday Loans Pros and Cons
Payday loans have pros and cons, just like any type of credit. Used wisely, payday loans can get you through a cash shortage quick. They can also help you avoid outrageous late fees and hits to your credit record. However, they are not the best credit option for long term credit needs. Cash advances are also limited to no more than $1500, less in some cases.
Fast Approval, Fast Cash
One of the prime benefits of a payday loan is that you can get approved and have your cash fast. Online applications take only a few minutes to fill out, especially if you choose the no fax option. Once submitted, your approval notice will show up in minutes. By the next business day, your cash advance will be sitting in your checking account.
No other form of credit can do that. In addition to a fast process, there is no credit check. Lenders simply request personal information, source of income, and account info.
Skipping Late Fees
Payday loans offer financing fees that are usually less than late fees, especially if you add on a NSF fee. A few bounced checks can quickly add up to a hundred dollars. But cash advances fees are typically around $15 for every $100 you borrow.
You should also consider the affect of late payments on your credit history. Late or missed payments stay on your report for seven to eleven years, increasing your interest rates for years to come.
Find Better Long Term Credit
Payday loans were never meant to be carried for several months. They are just designed to get you to your next payday. If you want several months or even weeks to pay off your loan, choose long term credit. Credit card rates are a fifth of payday loans. Personal loans are even better.
Loan Caps
Depending on where you live, there are caps on how much you can borrow. Most lenders cap their loans at $1000, but some will go up to $1500. However, if you live in Illinois, your payday loan limit is $400. $300 if you live in California or Hawaii. Your income will also affect your limit.
For larger loan amounts, you can turn to other sources of credit. Credit cards and personal loans can be helpful for unsecured debt.
Here are our
Recommended Payday Loan Companies
online.
Carrie Reeder is the owner of ABC Loan
Guide, an informational website about various types of loans.
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