Understanding Payday Debt Consolidation
A payday loan is also known as a cash advance loan or a payday advance loan. This short-term high interest loan is secured against the borrower’s next paycheck. The main aim of this loan is to provide cash within the shortest time possible. The borrower requires providing the lender with a valid national ID photocopy, proof of employment, a valid and working bank account for the loan to be processed. Normally, processing a payday debt consolidation takes a maximum of 24 hours. It is usually easy to obtain a payday loan because, the lender considers the borrower’s credit history nor does he require asset security or a guarantor.
Types of payday loans
Low fee payday loans
These loans charge a lower interest rate as compared to the normal payday advance loans. In this case, the lender usually checks the borrower’s credit history to determine his/her creditworthiness.
Online payday advance loans
These short-term loans are acquired online. Most people opt for the online advance loans since they are; hassle free, save time and money. The borrower visit the lender’s site, fills in an application form and in most cases, within a few hours, the money will be deposited in the bank account that was indicated in the application form.
Bad credit payday loan
This type of loan is awarded to the individuals who have a bad credit history. The lender does not verify the borrower’s credit history.
Military cash advance loans
These lucrative loans are offered to the military personnel. They charge low interest rates, which are constant across all military rankings.
No fax cash advance loans
This type saves a borrower’s from wasting time filling up the application form or faxing some information to the lender as proof.
Paperless payday advance loans
These loans are mainly offered online where the lender does not require the borrower’s proof of employment or bank account. The lender uses database assistance to verify the information provided by the borrower. This is the easiest payday loan to apply for.
No credit check cash advance loans
Here, the lender does not perform any credit check at all. All that is required id for the borrower to meet generic criteria before the loan is awarded. Usually, the main employment is the main security needed.
Pros of payday loans
- It is quite easy to qualify for a payday loan since they do not require complex procedures like the bank loans.
- They provide up to $1000 cash loan within a short period.
- Borrowers who possess a bad credit history can still qualify for the pay day loans.
- These loans provide instant cash to cater for emergencies or other personal issues that may arise.
Cons of payday loans
- These loans can only be provided in small amounts. The maximum limit varies from one state to the other.
- They charge high interest rates that sometimes may be almost 100 percent of the borrowed amount.
- They have a short payback period that ranges from 14 days to one month depending on the agreement between the lender and the borrower.
- In most cases, the terms and conditions provided by the lender are never clear.
- Often, the lender uses unlawful and daunting methods to recover their money once the borrower fails to honor the agreement.
In conclusion, though the payday debt consolidation assists when a person is facing serious financial constraints, it is a tough choice to make. However, before one considers a payday loan, it would be wise to seek help from family members and friends. Despite the high interest rates, this loan is a quick rescue when there is an urgent need
This can be like having a push button for loans.