Sometimes, you’ll find yourself in life being strapped for cash while there are bills that you need to pay. In this unfortunate circumstance, one of your options is to borrow money. Even for a small sum of cash, you can obtain a loan to tide you over until you have enough money to repay it and get back to normal.
Among the small loans that you can get today are payday loans. The good thing about this loan type is that you can obtain the money fast, and you can avail of it even if you don’t have a stellar credit score. If you want to get this loan, you can apply for no credit check loans in canada on PersonalMoneyNetwork’s website.
But is the “guaranteed” marketing legit? And how does guaranteed payday loans work? Let’s find out in this blog post.
How Does This Loan Option Work?
Lenders that provide guaranteed payday loans conduct non-traditional credit checks on borrowers. They don’t care as much of your credit history as your ability to repay the loan. So, instead of checking your credit score, these online lenders look at your source of income as the primary requirement for you to get approved.
However, the word “guaranteed” is not entirely true. Let’s just say it’s almost guaranteed. As long as the lender sees that you’re capable of paying what you owe, you’ll get immediate approval of your loan application.
The application process for this loan is straightforward because it’s online. Just send your credentials to the lender, and the latter will review it whether you’re qualified. Once the lender approves your application, you can get the money quickly. Your lender will transfer the funds to your bank account or send you a check just within the day of your application or the next day.
Keep in mind that online payday loans are short-term money loans. The word “payday” in its name means that you have to repay what you owe on your salary payment date, which usually comes every two weeks or one month.
It’s essential to manage your repayment when taking out a payday loan because the interest rate can be pretty high. Some borrowers of this loan are stuck in a debt cycle because they fail to create a budget plan for repayments.
Features You Need to Consider
For you to find a lender that offers the best deal for your financial situation, you should take note of these features.
- Loan amount. Payday loans are regulated by the state where you live. For instance, there’s a limit on how much money you’re able to borrow. It’s advised to go for a lender that allows borrowers to take out the maximum limit, especially if you want to borrow a higher sum of cash.
- Repayment period. Besides the amount of the loan, the loan terms of payday loans are also state-regulated. You better understand the state regulations on payday loan terms before you apply for one. Typically, payday loans have a repayment period of two weeks or one month.
- Time of access to funds. Online lenders differ when it comes to processing loan applications and providing the funds that borrowers need. If you want to use the loan for an emergency, make sure to go to a lender that provides you access to the funds just within the day of your application.
Benefits of Online Payday Loans
Choosing an online payday loan can help you survive a short-term financial problem. Here are some of the pros of this loan option.
- No hassle to apply for this loan. You won’t have any problem applying for a payday loan because the application is online. Just visit the website of the lender and submit your loan application there.
- You can use the loan for whatever purpose. Payday loans are good for any kind of purchase. You can use the funds to pay for a car repair, cover travel expenses, pay bills, etc.
- People with bad credit can avail of this loan. Since there’s no hard credit inquiry for payday loans, borrowers with poor credit scores can still get approved for this loan. The most important requirement is to have a regular income to receive approval.
- Regulated by the state. State governments have put regulations to prevent lenders from charging exorbitant fees and interest rates.
Drawbacks of This Type of Loan
After learning the advantages of taking out this loan option, let’s now discuss the drawbacks of online payday loans.
- Expensive interest and fees. If you compare payday loans to traditional loans, the former charges higher fees and interest rates. Lenders want to have a buffer against providing loans to high-risk borrowers. That’s why payday loans are more expensive than traditional loans.
- Predatory lenders and scammers. Online lenders are not easy to trust because some don’t follow regulations, and they put their borrowers into a debt trap. So, you must be extra careful looking for one.
Takeaway
Online payday loans are the go-to money loan if you need a small sum of cash for the short term. Learn the features of the loan, its advantages, and disadvantages before taking out one. You can review this blog post if you want to learn more about it.