Same-day payday loans can help you cover your needs if you are currently facing a financial emergency. However, take note that you will probably pay for the benefit or ease of short-term loans.
Keep in mind that payday loans are well-known for expensive fees and rates. With this type of loan, it is common to pay fees that convert to at least 400 percent annual percentage rates (APRs). Typically, payday creditors loan small amounts (at least $500), with repayment due by your next salary.
However, terms differ by state. Moreover, payday creditors usually endorse same-day or instant loan financing as a selling point. Even so, it does not always mean that you can get your loaned amount on the very same day you are approved.
Is It A Good Idea To Consider A Same-day Payday Loan?
A payday loan must only be considered as a last resort after exhausting or exploring other funding options. However, there are instances wherein this option might be the best choice to make especially in times of emergencies and you need quick cash. Look for reliable lenders when looking for a loan like instant loans in SiLoans.
If you are taking a same-day payday loan into consideration, it is essential to gauge the advantages and disadvantages.
The following is a list of pros and cons.
Benefits
- Depending on the law or regulations in your state, you can apply for a payday loan at a storefront or online store.
- Borrowers with fair or bad credit scores may still get approval for their same-day payday loan application. In fact, some creditors do not conduct credit checks.
- This type of loan is an unsecured loan. Not like a title loan or pawn loan, you do not have to put your personal property or car as collateral to secure the loan.
- If, for instance, you need to fix your car right away, same day loans will help you pay for this expense quickly. Generally, you can get the loan the same day or after one business day. It depends on the lender.
Downsides
- It is recommended to build an emergency savings fund to use whenever sudden expenses arise. If borrowing small amounts of money becomes a habit, you’d surely find yourself relying heavily on debt rather than fixing underlying problems.
- Payday loans can potentially put you in a debt cycle that is hard to get out of it.
- Payday loans often have high annual percentage rates and fees.
Other Options
Payday loans are not the only available option if you need to borrow cash quickly. It is a good idea to compare other options with payday loans to find the correct option for your situation.
Cash Advance
This funding option lets borrowers take out a loan against the available balance of their credit card. However, a cash advance usually comes with higher interest rates and processing fees than typical credit card purchases.
If you do not want to use your credit card, there are applications available today that offers something new on cash advances, including:
- Branch is an application that allows you to ask for at least 10 percent cash advance of your last salary. The loaned amount is directly subtracted from your bank account. What’s more, you can choose for the instant deposit option ($3.99), which frees you of mandatory fees.
- Earnin is an application you can utilize to obtain a salary advance for the time you have worked before you get paid. Generally, you can receive at least $100 each day without interest and fees.
Existing Credit Card
You might want to consider using your credit card (if you have one) when you need money fast. Unlike the interest rates for payday loans, the rates on your existing credit cards can be more competitive.
Small Dollar Personal Loan
Unsecured personal loans are repaid in monthly installments over a period. The terms of the loan may differ by lender. However, it usually ranges from 24 to 84 months, providing you some time to disseminate the payments.
Payday Alternative Loan
For the most part, payday alternative loans are offered by some federal credit unions, limiting your loan application fee. Moreover, loan amounts can range from $200 to $1000. Also, it can arrive with terms from 1 to 6 months. Here’s the catch: you must be a credit union member for about one month to apply for a payday loan alternative loan.
Takeaway
Keep in mind that payday loan regulations and laws differ by state. Some countries do not permit same-day payday loans, while other states have stringent regulations for how much payday loan creditors can charge to allow you to borrow and how much lenders can lend.
If, for instance, you are considering getting a payday loan, it is an excellent idea to check and understand the laws in your state first and check reviews online. Additionally, remember that there are alternative borrowing options you should explore first before choosing to take out a payday loan. Use a payday loan only when you have no other option.
