What do you mean by payday loan?

A loan which isa short-term, unsecured and small cash loan that borrowers get from lenders to finance their expenses until their next salary comes. The lenders lent the borrowers a small principal of their salary at a rate of 30% interest.

It is only credited to those in the working class and making an income but unable to meet their expenses. You are needed to payback these loans within 7 to 60 days, it will depend on the loan provider. Payday loans are short-term and urgent types of loans with a very high risk, which are very costly to payback. You can take these loans easy payday loans online from various sources. In India, it is taken for weddings and for emergencies.

What are the advantages of payday loans?

Payday loans can act as a life saviour for those individuals who are making their livelihood on a monthly based income. Let’s discuss some advantages of payday loans.

  • It is easy and quick: it is often credited within minutes of documents passed.
  • Minimum formalities and documentation: the minimum requirement in most cases is they will only need proof of income and a passbook.
  • A credit check is not necessary: the lenders will offer loans for a very short period of time; thus, they will not check the credit score; they will provide loans to all financial background’s individuals.

What are the disadvantages of payday loans?

There are some disadvantages of payday loans which are mentioned below.

  • Higher interest rates may be life saviors, but sometimes if you cannot pay back at the given time, you may be stuck in the loop; they charge such high rates of interest that you will have to pay double the amount.
  • Debt trap: suppose you cannot pay back, then they will impose high fines which will make you take loans again and again, and they will repeat the cycle; thus, you will get stuck.

Is there any alternative to payday loans?

Yes, there are some alternatives you do to escape the matrix of the payday loan trap, which are as follows:

  • You can reduce your expenses.
  • Try to ask friends and family.
  • Instead, payday loans take personal loans.
  • Use credit card
  • Borrow from your employers.

This alternative option will help you to overcome the debt trap, or you will never get stuck in their trap.

Last words:

As we have discussed earlier in the article, it can be life saviour if you can pay the loan amount back on time; if you fail to do so, you may get stuck in their loop forever or until you can pay it back with the fined amount. So, avoid taking easy payday loans online as much as possible.