Payday loans are a form of short-term borrowing issued based on your earnings. A payday loan provider usually requires you to provide proof of income at the time of application. Upon meeting their minimum requirements, payday lenders will give you a part of the amount you expect to be paid.
Since the loans are short-term, you must repay within a short period, usually 30 or less days. Although payday loans are considered predatory, they come in handy when experiencing a financial crunch. Discussed below are five benefits of payday loans.
1. Fast access to cash
Payday loans, including instant payday loans from My Canada Payday, come in handy, particularly when in a situation that needs money quickly. The loans are available online, which eliminates the need to visit the lender in person, saving time. Also, payday loans don’t involve a lot of paperwork- you only have to meet the lender’s minimum requirements and agree to the loan’s terms and conditions.
When it comes to payday loans, most lenders don’t look at your credit history, meaning time won’t be wasted on credit checks, making the process even faster. Upon a successful application, most payday providers will approve your loan almost instantly and wire the funds into your account within minutes or even a few hours, making them suitable for emergencies.
2. Payday loans are easy to qualify for
Unlike bank loans, payday loans are easy to qualify for, provided you can meet all the basic requirements. While payday lenders are different, most of them will require you to meet the following criteria:
- Provide proof of income: To qualify for a payday loan, you must submit proof of income, which is mostly pay stubs from your employer
- Be at least 18 years of age
- Own an active checking account
- Provide proof of identity, which can be your driver’s license or government-issued ID
3. Payday loans are ideal for those with bad credit
Qualifying for a conventional loan requires having a good credit score, without which you become ineligible because you’re seen as a high-risk borrower. Payday loans are a perfect solution for those who cannot qualify for bank loans due to their bad credit history.
While not all payday lenders will approve your application if you have low or no credit, some specialize in providing bad credit loans. Additionally, many payday loans don’t involve credit checks, meaning you can qualify regardless of your credit history.
4. Payday loans are unsecured
Unlike secured borrowing, unsecured loans don’t involve any collateral. Since payday loans are unsecured, you won’t be required to use any assets as a guarantee. This reduces the risk of losing something valuable in case you default. The fact that payday loans don’t require collateral means those without any assets they can use to secure a loan won’t be locked out, making them easily accessible.
5. You can use the money on anything
Payday loans don’t have restrictions on how the funds issued should be spent. You’re at liberty to use the money as you please. You can spend the money on:
- Your daily expenses
- Medical bills
- Car repairs
- Home improvement
- A vacation
Endnote
Payday loans are an ideal option for anyone looking for fast cash. Familiarize yourself with the benefits of payday loans to determine if they’re worth considering.