What are payday loans?
Payday loans are short-term unsecured loans, often with high-interest rates. The word payday for a payday loan refers to the case where the borrower writes a check dated to the lender with the payday wage but accepts a portion of the payday amount in money from the lender.
How do these loans work?
Payday loan lenders will review your revenue and checking data and deliver cash on the spot at the store or the same day if the transaction gets made online. The lender needs a signed statement or permission to withdraw funds electronically from your bank account. Loans expire immediately after the next payday, usually two weeks, and in some cases, one month.
If the loan gets issued at the store, you can repay it before or on the loan’s repayment date. If you do not show up, the lender will review or pay the loan amount and interest. Online lenders use electronic payments.
What are the pros of payday loans?
- Quick turnaround time
The entire process takes less than five minutes. It is limited to “Instant Loans” and will deliver the coveted funds at your fingertips within minutes. It is one of the most significant benefits for those in urgent need of money.
- You do not need a lot of documentation
These loans are most often processed online through the bank’s website or mobile app. In addition, they only need your PAN digit and mobile phone number to draw out your credit report and evaluate your eligibility. It saves you the trouble of filling out forms and submitting copies of records.
- You can get the loan amount as per your requirement
You can get it anywhere. These loans range from ten thousand rupees to ten lakh rupees. You can borrow as much as you need and efficiently repay it. Also, you do not need to give proof of the required loan amount and purpose of use. You can enter the amount you need to borrow, and the application will confirm your eligibility. If your wages and credit back the loan amount, you got it.
- Repayment tenures
These are short-term loans. The period ranges from seven to sixty days. In addition, there is no regular repayment. There is only one repayment at maturity, which includes principal and interest. The lender may request a fixed date PDC for the final amount or set up an automatic transfer from your bank account on the end date of the loan. It ensures that the loan will get repaid in time.
These loans are a practical option when you need money urgently. The design of these loans is such that they are quick and generally manageable to get authorization on if the applicant has a job. You can approve a payday loan application in minutes, but the interest rates on loans are very high. You can also get a payday loan with bad credit.