Payday loans are the perfect solution for anyone looking for quick and easy fast cash to cover their financial emergencies. Payday loans, such as Little Loans, are designed to help people with sudden financial emergencies by providing them with small loans. Typically, the payday loan is paid back when the applicants receive their next paycheck.
Most payday loans are unsecured; however, depending on the lender, some payday loans are also secured. Secured payday loans require collateral, such as a car or any other valuable asset; whereas, secured payday loans don’t require collateral.
However, the interest rates of unsecured payday loans are usually higher, and the amount is based on how much the applicants earn. Besides, the approval process of payday loans is easier as no credit check is required.
Who is eligible for payday loans?
While the eligibility criteria might differ from one person to another, some universally applied check-boxes include that the applicant must be eighteen years or above. Also, the applicant must have a steady source of income and an active checking account. Moreover, the applicant must be a resident of the United States and reside in the state where they apply for the payday loan.
The application process is usually easy and enables borrowers to apply from the comfort of their homes through their smartphones or computers. Usually, the lenders are available 24/7, allowing people to apply for payday loans whenever some financial emergency arises.
Fixed vs. Variable Loans
Loans have either fixed interest rates or variable interest rates. Payday loans are usually returned in a lump-sum payment, which usually happens when the applicant gets their paycheck. In the case of variable interest rates, loans are paid back in installments with fluctuating interest rates.
What are the benefits of payday loans?
- Fewer Requirements
The requirements of payday loans are usually fewer than other conventional bank loans. As mentioned before, the eligibility criteria include that the applicant must be 18 or above, be a citizen of the United States, have an active checking account, and have a steady source of income. At the time of applying for the loan, the applicant must provide their social security number or any other proof of identity.
- Easily Accessible
Payday loans are perfectly designed for urgent money needs, especially when the applicants can’t wait for their next paycheck. Unlike bank loans, the application process of payday loans only takes a few minutes, and after approval, the amount gets transferred to the applicant’s bank account (s) on the same day.
- Unsecured Loan
Payday loans are essentially unsecured, which means that you don’t have to provide the lender with collateral to get approval for the fast cash. Secured loans require loan applicants to stake their valuable assets as a security token that the lender can seize if they fail to repay the borrowed amount.
Final Thoughts
Payday loans are specifically designed to cover financial emergencies and short-term expenses. Usually, people who apply for payday loans use the amount for sudden medical bills or car repairs.
