For the many who find themselves financially in need in an unexpected time, the never ending debate of whether getting a payday loan can help the situation will always present itself. This is why people often ask, are payday loans good or bad? The answer really depends on whether one can afford to pay the loan or not. Payday loans carry a lot of advantages as well as disadvantages, and people should take these things into consideration before ever making a decision.
One of the biggest advantages (and selling point for that matter) of payday loans is that they don't really require one to have a perfect credit history to qualify. As long as the borrower is employed or has a steady income, and has been earning regularly for atleast 6 months, then they can qualify for a loan. Secondly, you don't necessarily need a collateral for these types of short-term loans. Instead, they simply adjust to what you are regularly earning, and start from there. However, bigger amounts of loans are sometimes offered and taken into considerations depending on the scope of their situation and need.
Another thing that's good about these types of loans are that most of the people who need them, are more likely to get them. Payday lenders usually interested in working out with the people in need to make sure that the person will get the financial needs and support in order to make the most out of a bad situation.
The Disadvantages
Along with it's advantages, there are also some disadvantages that borrowers should be aware of. For one thing, these short-term loans always carry higher interest rates than traditional kinds of loans. The interest rate can something go along the lines of around 60% or more. This amount is huge, and people will find that they will be paying more than twice the amount of their loans with this interest. Secondly, failure to pay for your loans can ruin your credits and may give you legal complaints to dealt with. However, borrowers can ask for an extension or a new repayment plan from the lenders, but by extending the repayment terms, more charges will be included and the loan becomes more expensive than its original amount plus interest. It's a slippery trap that brings people with a decent credit history fall into something where they can't qualify for anything else.
So now that you've had an idea on both sides, is a payday loan something you would consider good or a bad thing? For most people, there are more options out there to consider before getting a payday loan. The reason is if they can save some money themselves, then they wouldn't have to be resulting with this option. However, if there seems to be no other option and the need for money is time essential, then they are going to find out that getting a loan would be the best option and may be a good one if handled carefully.
