Before we see more of that, we have to unravel the mystery of payday loans. What do you mean by payday loans? These are unsecured short-term loans which are also referred to as payday advances. You won’t have to show any collateral. However, you need to be working somewhere as steady income is a pre-requisite for payday loans. In most cases, you may be asked to submit pay stubs. But payday loans are regarded as all sorts of small, short-term loans these days. As the name indicates, you will pay the amount fully or partially on your next payday. However, payday loans are regulated across the US. Rules can vary from state to state in the United States.
Payday Loans are very big business
Payday loans have so many takers. As a result, it has become a big business all over the world. Since it is really difficult to obtain regular bank loans, more and more people are turning to payday loans. Such loans are perfect for handling their small debts or emergency payments at the last minute. Payday loans can be applied for paying your monthly bills as well. Therefore, we are not surprised with the kind of success and popularity obtained by payday loans. Since it can be applied online, more and more tech-savvy young people are applying for payday loans. As a result, we are flooded with so many companies in the business today. People appreciate the ease and convenience attached to payday loans.
Comparison with other types of loans
Let’s compare payday loans with other types of loans. Yes, payday loans can be really expensive compared to traditional loans since interest rates are very high. When you consider yearly APR, it might look like a huge sum. But you need to be aware of the fact that yearly bank overdraft fees can be equal to the interest rate of payday loans eventually. In fact, payday loan lenders don’t even consider themselves as banks. They publicize themselves as internet technology for borrowing some quick money.
Payday loans are available 24×7 and it can be highly attractive to many people. When it comes to regular banks, they work only during business hours. Moreover, they might take weeks to approve your loan applications. In most cases, they might reject your application. Considering that payday loans are available 24×7. Since you can apply for a payday loan online, you can walk away with the money within next 24 hours’ time. They have a fully automated process in place. You don’t even have to speak to an employee. If you fill up your form correctly, you can expect to see your application getting approved in the next few hours. In most cases, the money will be transferred to your account in next 24 hours’ time. This is not the case with traditional banks as there you have to wait for weeks to get your application approved. In some cases, you only have to text the amount and they will transfer the money in no-time.