Online loans – Is it a boon or a bane?

Online loans – Is it a boon or a bane?
  • Opening Intro -

    Payday loans are in general the best solution for you if you have to pay any unexpected bill whether for medical emergency, home improvement, car repair or anything else.

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If you are in need of instant cash, then online loans are your best options. Often known as payday loans or cash advance, these loans breathe life back to you if you are in dire need of cash and your payday is quite far away. The best part of these online loans is that they take extremely little time for getting processed and thus you get the loan amount you had applied for in less than twenty four hours of time.

Payday loans are in general the best solution for you if you have to pay any unexpected bill whether for medical emergency, home improvement, car repair or anything else. Companies which provide you with online loans respect your privacy and you won’t be required to give the reason as to why you need the money. The best part of online loans is that these are loans for people with bad credit. If you have your credit score impaired by debt defaults, debt settlement or even bankruptcy, you can still apply for online loans and get approved as there won’t be any credit check.

Why are online loans so popular?

Online loans or payday loans are popular because of various reasons. First of all the criteria for being eligible for a payday loans are quite simple and easy to achieve. These are;

●        You have to be at least 18 years old.
●        You have to have the citizenship of U.S.A.
●        You need to be working for at least 6 months.
●        You need to have a savings or a checking account.

Apart from these there is also the fact that you wouldn’t need to submit lengthy documents regarding the proof of your income or your credit report for a credit check. This has two advantages. First of all, you can qualify for an online loan even with a poor credit score as your credit score won’t be considered. Secondly, as you don’ need to submit any document that needs to be evaluated, the whole process of application of payday loans and its approval takes place very soon. Your job is to search for an appropriate online loans company and then fill out the application for a loan online. After you submit the application form, it will take at the most twenty four hours for the money to get credited to your account.

What are the drawbacks of online loans?

Online loans are increasing in popularity as they are the solution to instant cash need when you have no other option and they are so easy to get. However, there are certain drawbacks that come with online payday loans. The most obvious shortcoming of online loans is their high interest rate. Usually such online loans are given to you for a period of fifteen days to thirty days. You are expected to pay back the debt when your next payday arrives. But what happens most often is that majority people who take out payday loans are not able to pay back the debt within the debt period. As a result of this they roll on the balance to the next month. Once you have rolled on the balance, immediately interest rate starts accruing on the initial amount of debt balance that you had. Thus your debt now becomes much larger because of the exorbitantly high interest rate and you permanently fall in the trap of payday loan debt. Once you are in this trap, it becomes extremely difficult to escape from it. Thus in spite of the appeal of online loans, you should be careful before taking out one.

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Categories: Consumer Financing

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Krayton M Davis

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