Sooner or later one understands that both objects and concepts are never good or bad, the only way of judging either morally or from an utilitarian perspective such things is analyzing the use that people give to them. Consequently, under the right circumstances the use of payday loans is beneficial and under wrong circumstances, the use of payday loans will cause negative effects and should be considered a misuse.
The Rights, The Benefits
If you are going through an emergency and need funds for purchasing goods, medicine, paying for medical or legal fees, etc. Payday loans are the fastest loans when it comes to approval and money transfer. Once you have applied for a payday loan, you will be approved within the day and you will have the funds deposited into your bank account by the next day at most.
You can protect your credit report and avoid costly punitive fees by taking a payday loan to cancel debts or bills that are about to be due. Sometimes, the punitive fees and consequences of negative inputs on your credit report can be higher (in terms of costs) than the actual payday loan fees.
The requirements for approval are not harsh at all. There are absolutely no credit verifications needed to get approved and there is also little to no paperwork to be done. Some lenders may require faxing some information but most of them will not even require that.
Moreover, all loan applications can be done either by phone or 100% online which does not require you leaving the comfort of your home.
The Wrongs, The Disadvantages
The fees are high, so high that lenders avoid speaking in terms of interest rates because the figures would scare customers away. Instead they use more appealing approaches like "only $10 every $100" which expressed on interest rates stands for 120% APR (the highest credit cards charge 25% APR at most).
The amount of money you can request is significantly low. You can obtain up to $1000, $2000 at most. And most payday loan lenders will not offer more than $500. This implies that if you need higher amounts, payday loans are not the way to go. Not only because you would need to request several payday loans to reach a significant amount, but because the fees involved would be abusive and unaffordable.
Though you can rollover a payday loan, the fees tend to increase and being that they are already high, imagine paying up to $50 every $100 or even more. That equals to 600% APR which is outrageous. Thus, you should always make sure you will be able to repay your payday loan if you run into an emergency situation and you need to resort to this kind of loans to cope with it.
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