Payday loans are very short term loans with high rate of interest
. But the biggest advantage is that they provide instant money in the account of the customer. These loans are not designed for a large amount or for a very long period. In fact the nature of the loan is such that one has to repay the loan amount at his next payday. But they really help a consumer in case of unexpected bills and other financial emergencies.
But there is a rumor that the payday lenders impose a high rate of interest and hence the consumers have to pay a huge amount of money as repayment. This is actually not true. If you go through website of a payday lender, you will find the rate of interest in terms of APR (Annual Premium Rate). This is generally high. So normal people get confused and calculate their repayment amount using this APR value. But this is not the right method. The APR is calculated annually and the nature of payday loans is such that the amount has to be repaid in a short interval. So there is no truth in fact that the repayment amount is very high. It is high as compared to normal loan, but considering the benefits which it provides like money in very short time, there is no need to submit any documentary proof at the time of applying. So these benefits are not provided by normal loans.
The process of applying for payday loans is very simple. Just one online application form is needed to be filled. After filling the application form, payday lenders will decide whether to sanction loan to the borrower or not considering many features. Most important of them is the credit history of the borrower. But if the lender finds these parameters to be ok, then the money will be available in the account of the borrower in a matter of few hours. Also if the lender feels that the amount you want to borrow is not suitable considering your credit history, then they might also reduce the loan amount ordered by you. This is just done to ensure that you will be able to repay the amount on time. So anyhow you will receive money in your bank account may be a smaller amount.
Hence, these payday loans can be a great help to a consumer in case he meets any financial emergency. The amount is provided in bank account in a matter of few hours. So one can apply at the time when he in need. So the crunch can be met immediately with the money. There is no need to ask for help from friends as this can bring your economic situation in front of all.