Are you considering taking out a payday loan for an emergency, such as a medical bill or catching up on your car repair? Do you think that payday loans are too good to be true? Well, here’s what you should know about them before choosing an online lender like FlashApply and heading down the route of becoming one of the five million Americans with a payday loan.
Pros and Cons of Payday Loans
When you need a short-term financial solution, a payday loan can be a great option. However, there are also some cons to consider before taking out a payday loan.
Pros of payday loans include that they’re fast and easy to get. Plus, there’s no paperwork or credit check required. You can get a payday loan in just minutes from your phone or computer.
However, there are also some cons of payday loans. Many people use payday loans to cover expenses that they can’t afford to pay back in full. This can lead to massive debt loads and costly interest rates. Plus, if you don’t have an emergency fund ready, you might find yourself in trouble when your paycheck doesn’t cover your entire bill.
Before taking out a payday loan, it’s important to weigh the pros and cons carefully. It can be a great way to solve a short-term financial crisis, but it’s important to be aware of the risks involved.
Things to Know Before Paying a Loan
Before you take out a payday loan, there are a few things you should understand. Here are some things to keep in mind:
- Payday loans are very high-interest loans. The interest rate on a payday loan can be as high as 29%!
- Payday loans are typically not affordable for people who don’t have good credit. Payday loan companies typically require a credit score of at least 650 to get approved for a loan.
- Payday loans are usually only available during the week. Most payday loan companies only offer loans on Monday through Friday, between the hours of 10am and 6pm.
- Payday loans can lead to long-term debt and financial problems. If you don’t repay your payday loan on time, your lender can take several actions, including contacting your employer, filing legal action against you, or garnishing your wages. These measures can seriously damage your credit score and economic situation.
A couple more things to know about payday loans:
- You can usually only use the money you borrow from a payday loan to cover current expenses. You can’t use it to pay off your debt or save for future bills.
- If you don’t repay the loan on time, your credit score could suffer. If you’re unable to repay the loan in full, the lender may put your loan into default. This means that you won’t be able to get any new loans until you’ve paid off this old one. In some cases, this can result in financial problems down the line.
We hope that now you are better prepared for what a payday loan will look like and will make an informed decision.