Payday
Loan and Cash Advance Pros and Cons
What are
the pros and cons of payday loans and cash advances?
Pros
1. Payday loans
and cash advances are relatively easy to obtain.
2. In most instances, a credit check
is not necessary in order to be approved for a payday loan or cash
advance.
3. A payday
loan or cash advance can be approved and funded quickly, in most cases,
the very next business day.
4. A payday
loan or cash advance requires no collateral.
5. Payday loans
and cash advances often require less paperwork than conventional loans.
6. Not only can
one locate a payday loan or cash advance company close to home, it is
also possible to obtain a payday loan or cash advance on the internet
and in the privacy of your own home.
7. Payday loans
provide quick cash when unforeseen circumstances arise. Cons
1. Payday loans
and cash advances can be very expensive, sometimes as high as 500%
interest per year, or more.
2. If a
borrower does not repay their payday loan or cash advance in full and
keeps extending it, it can quickly lead to soaring debt and fees.
3. Some payday
loan and cash advance companies utilize unscrupulous, unethical and,
sometimes, illegal means to collect on defaulted loans.
4. Payday loans
do not solve long-term budgeting problems and often only offer a
short-lived solution.
5. Payday loans
and cash advances are illegal in some states.
6. Many payday
loan and cash advance companies make borrowers sign contracts
stipulating terms that are highly favorable to the lender and not the
borrower.
7. Some payday loan companies have
been known to resort to unscrupulous and unethical means in order
to collect on a loan. |
