Sometimes you will find yourself running out of money in life when there are bills you need to pay. In this unfortunate circumstance, one of your options is to borrow some money. Even for a small amount of money, you can get a loan to tide you over until you have enough money to pay it back and get back to normal.
Among the small loans you can get today are payday loans. The good thing about this type of loan is that you can get the money fast, and you can take advantage of it even if you don’t have a stellar credit score. If you want to get this loan, you can apply for a no credit check loan in canada on the PersonalMoneyNetwork website.
But is “guaranteed” marketing legitimate? And how do secured payday loans work? Let’s find out in this blog post.
How does this loan option work?
Lenders who offer secured payday loans perform non-traditional credit checks on borrowers. They don’t care about your credit history as much as your ability to repay the loan. So, instead of checking your credit score, these online lenders consider your source of income as the main requirement for you to be approved.
However, the word “guaranteed” is not entirely true. Let’s say it’s almost guaranteed. As long as the lender sees that you are able to pay what you owe, you will get your loan application approved immediately.
The application process for this loan is simple as it is online. Just send your credentials to the lender, and the lender will review them if you qualify. Once the lender has approved your application, you can get the money quickly. Your lender will transfer the funds to your bank account or send you a check just the day you apply 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 must repay what you owe on your payday due date, which usually happens every two weeks or a month.
It is essential to manage your repayment well when taking out a personal loan because the interest rate can be quite high. Some borrowers of this loan get stuck in a cycle of debt because they fail to create a budget plan for repayments.
Features to Consider
For you to find a lender that offers the best deal for your financial situation, you need to take note of these characteristics.
- Amount of the loan. Payday loans are regulated by the state where you live. For example, there is a limit to the amount of money you can borrow. It is advisable to opt for a lender that allows borrowers to take out the maximum limit, especially if you want to borrow a higher amount of money.
- Refund Period. Apart from the loan amount, the loan terms of payday loans are also regulated by the state. You better understand state regulations on payday loan terms before you apply. Typically, payday loans have a repayment period of two weeks or one month.
- Funds access time. Online lenders differ when it comes to processing loan applications and providing the funds borrowers need. If you want to use the loan for an emergency, make sure you go to a lender who gives you access to the funds 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 advantages of this loan option.
- No worries about applying for this loan. You will have no problem applying for a payday loan because the application is done online. Simply visit the lender’s website and submit your loan application there.
- You can use the loan for any purpose. Payday loans are good for any type of purchase. You can use the funds to pay for a car repair, cover travel expenses, pay bills, and more.
- People with bad credit can avail this loan. Since there is no credit check for payday loans, borrowers with bad credit ratings can still get approved for this loan. The most important requirement is to have a steady income to receive approval.
- State regulated. State governments have regulations in place to prevent lenders from charging exorbitant fees and interest rates.
Disadvantages of this type of loan
Having learned the advantages of taking out this loan option, let us now discuss the disadvantages of online payday loans.
- High interest and fees. If you compare payday loans to traditional loans, the former charge higher fees and interest rates. Lenders want to have a buffer against lending to high-risk borrowers. This is why payday loans are more expensive than traditional loans.
- Predatory and scam lenders. It is not easy to trust online lenders as some do not follow regulations and put their borrowers in a debt trap. So you have to be very careful while looking for one.
Online payday loans are the money loan of choice if you need a small sum of money in the short term. Find out about the characteristics of the loan, its advantages and disadvantages before taking out one. You can check out this blog post if you want to know more about it.