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Sunday, September 1, 2013

The Advantages and Disadvantages of Instant Payday Loans

Instant payday loans - don't they sound just too good, like instant noodles and instant cakes?

Instant payday loans or same-day loans are availed when a person is facing some form of financial emergency, and they need a small amount of money instantly. These payday loans are labeled as instant because the application is processed right away and you get the money transferred into your account within 24 hours. Suppose you are going in for the online variety, things are much easier. All you need to do is fill in the application online with your account info and personal details like your age, monthly bank statements and a copy of your last paycheck from work. Such documents can be scanned and uploaded instantly, though some lenders may require these papers to be sent by fax.

The beauty of instant payday cash loans is the fact that they do not require you to submit any papers or documents for evaluation. This cuts processing times by more than half and the effort you have to put in to avail the loan is nil. Instant payday loans are more easily approved if you turn to a licensed lender in your state than to a bank, for instance. You can access the list of licensed lenders on the Internet and choose the one that meets your needs the best.

The main benefit of instant payday loan, besides ease and comfort is privacy and security. You can get the amount in your account without having to step out of your house. Online transactions made by reputed companies are 100% secure and you need not fear that your personal information will land up in the wrong hands.

But, instant payday loans are not without their disadvantages.

The biggest trap many borrowers fall into is to take advantage of the comfort factor and avail of several no credit check payday loans at a time. Thus, they find it impossible to give the money back.

This happens mainly because borrowers want to extend the period of the loan. When you roll over the payment for just one time, the price of the payday advance becomes double. Moreover, keep in mind that when you pay for roll overs, you are simply taking care of the fees and not contributing in any profitable way to your active balance. Therefore, paying $15 or $25 per $100 borrowed just because you need to keep the loan active adds up to a considerable sum that would have covered the debt. Don't apply for a payday loan if you cannot give the money back in time, and never try to consider compensating one loan with another payday advance.

The borrower alone can look after his or her best interests in this business. Consumer protection and government regulation are scarce when it comes to instant payday loans since the rules are set by the lending business. Consequently, it is important to consider all the contract data and obligations on the part of the borrower in detail so you can avoid financial disaster. Remember, it takes just one wrong step to go sliding into the morass of oversized debts!


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