You must have heard a lot about the payday loans. Perhaps, it is the popularity of this type of loans that has given rise to such rumors. However, if you consider the rumors about payday loans and compare them with reality, you will find that despite rumors, in most cases the loans are extremely beneficial and can help you meet your urgent requirements. What are the common misconceptions about payday loans? Here are some examples.
Myth: 1
The most common misconception about payday loans is perhaps the belief that payday loan have dubious terms and will exhaust you of all the money. In reality however, these loans have very simple terms and anybody can understand it. This negates any chance of being cheated. However, many seem suspicious about the loan because of the huge benefits that are associated with it. They simply can't believe that such an opportunity exists. The truth is that these loans are safe and very helpful.
Myth: 2
Another very common misconception is the fact that lenders are the only people who profits here. This is not true and the borrower can be equally benefitted. Thanks to the payday loan, a borrower can get the money within 24 hours. More over, your money is sanctioned without any complicated paper works. At the same time there is no consideration of your credit history as well. These are certainly great advantages when you actually need the money in a short span of time. Another advantage with this loan is that the transfer of money is done automatically. The money is delivered directly to your account. Again, when the payback time comes, the money will be debited automatically as well. You don't even have to talk to the pay day lenders and can maintain complete anonymity.
Myth: 3
Many people believe that these loans are suitable only for people who come from lower economic strata and face frequent financial emergencies. However, the statistics reveal that as many as 94% of the borrowers have at least a High School diploma and the average annual income of the borrowers ranges from $25,000 to $50,000. This means that the payday loans are paid by the common Americans.
Myth: 4
Payday loans are often considered expensive because of its high interest rate. However, it is important in this respect to understand the context in which this loan works. Normally, the loan has to be paid within a couple of weeks. Also, the amount of the money is very small. Consequently the amount of money that you have to pay as interest is very small. The fear would have been true, had the duration of loans been long term and were to be paid in a year or so.
Myth: 5
If you are thinking that these loans are only for emergencies then you are mistaken. These loans can be very useful to pay the bills or spend a small vacation. Well, if you have a friend and you are ready to ask him for the money, you can go for it. But, if it is embarrassing for you, the payday loans are the best solution.
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