Most people have heard about payday loans, but those who have never investigated the process may know very little about how payday loans are provided and why they are so beneficial.
Dispelling Common Myths About A Payday Loans
One reason why people tend to shy away from payday loans is because they’ve heard about amazingly high interest rates. What is important to know is that, from an interest standpoint, they are looking at an annual interest rate. However, most payday loans cannot legally extend beyond a month before full repayment is made. Therefore, if a payday loan provider shows an 1800% annual interest rate, that number is going to be significantly reduced seeing as how the life of the loan may be anywhere from two weeks to a 1 month period.
A Limitation on How Much a Person can Borrow
Many people are unaware of the fact that most payday lenders will put a cap on how much a person can borrow. Because of the higher interest rates and because it is a short-term loan, the more money a payday lender loans to an individual, the more of a risk loan default becomes. For that reason, payday lenders cap out loans at slightly over 1000 pounds or less, depending on the individual.
The Convenience and Accessibility of Payday Loans
As far as the process itself, payday loans are popular because they are so accessible. Payday loan requirements are extremely minimal. In addition, a person can have access to the funds in anywhere from 24 hours to as little as 3 hours. Add to this the fact that a person will typically apply for one of these loans online, get approved for the loan and have the money deposited into their account without ever having to leave the house. This raises the value of convenience.
If you need emergency cash, but you’re somewhat leery about a payday loan, you might want to look little closer at the details of these loans. You may find that it is not as intimidating as you once thought. That’s why, if you’re interested in asking questions about the payday loan process, you can find more help here.