October 19

Payday Loans vs. Standard Credits

Quick credit in most developed economies is known under the name payday loan – or payday advance, salary loan, payroll loan, small-dollar loan, short-term, or cash advance loan. This is no accident at all – the origin of this industry in the Western countries is precisely the very short-term loans given to workers in the 19th century to cover their household expenses to salary.

The first payday loans have emerged in the US in the mid-19th century. Click To Tweet

As we have said, the first payday loans have emerged in the United States in the mid-19th century. The banking system in the newly established country has been developing wildly, and many people have not even had physical access to it – and modern products like overdraft have not yet been invented. This has created a flexible network of financial houses that offered super short-term loans to workers in the working class who, for whatever reason, had difficulty in covering their living expenses a few weeks before receiving their salary. This sector was initially completely deregulated, with many benefits, but some risks – de facto, almost everyone had access to credit, but the collection of bad loans was difficult.

At the beginning of the 20th century, the state began widespread regulation of the sector, with payday loan becoming popular in Europe as well. It is only at the end of the 20th century that the sector is expanding to the model we know today – payday loans for multiple television buying needs through luxury vacations and small business assets to small property deals.

However, practice shows today that it is the old ways in payday lending are the best – that is, this product is used most successfully by people with stable incomes who want to cover unforeseen expenses and to repay the loan within few months.

We can summarize that payday loan is best to take when:

      1. You need a lump sum of money for a specific purpose, and you are planning to return it in a relatively short time;
      2. For one reason or another, you do not like the credit cards. Recently, their service has become more and more expensive in terms of fees, as banks are reorienting their sources of profit from interest on fees. Handling a credit card is psychologically proven to predispose to higher costs because one does not see the money physically;


  1. You have no time, patience, or just the desire to go through the much longer procedure of withdrawing a small bank consumer credit. Over the last few years there has been a centralization of the credit approval process, which has further delayed the procedure;
  2. You consider usurers and pawnbrokers as an over-risk source of money.
Credit Cards are now more and more expensive Click To Tweet

On the other hand, it is not a good idea to use a payday loan for:

  1. Numerous recurring purchases. Though you could cover them with payday loans, it would be far more profitable to use a credit card or overdraft loan;
  2. One-time significant expense requiring a loan of more than 18 months. In such cases, it is most reasonable to refer to traditional bank financing;
  3. Returning the payday loan will require monthly installments of more than 70% of your earnings;
    Investments. Payday loans have never been and will never be suitable for financing investments;
  4. Risk speculation in the absence of another stable monthly income.

After I introduced you to the advantages and disadvantages of quick loans you can decide whether to borrow or not.

October 19

Primary Benefits of Payday Loans Online

Next time you are in critical need of some cash, and you need to get it rapidly, you can consider payday loans online. This kind of loans is relatively new on the market.

So far, the traditional methods for acquiring a loan were principally through credit cards or by applying for personal loans. Positively, these are appreciated and accepted choices for anybody, yet they do accompany their particular limitations.

When utilizing credit cards, you are provoked to spend significantly more than maybe you could bear.

In fact, they were designed precisely for this reason, as they allow you to pay a specified minimum amount, and accordingly, extend the payment of your contribution for quite a while to come.

This new product acts the rescue of individuals who can’t qualify for credit cards for whatever reasons, or who need to keep away from the bother of getting one. Payday loans make a decent substitute for conventional lending. They are very well known with specific sections of our society.

Here are the primary advantages of payday loans online:

1) Simple Procedure

The procedure of getting a payday loan is simple, comfortable and quick. You may apply for a loan and anticipate that the funds will be in your account in a matter of hours. No traditional bank can coordinate that speed of authorizing a loan. This is possible because of the online methodology for getting and disbursing the loans. The borrower essentially needs to fill up an online application, giving some personal, subtle elements, and then wait for the loan that will come through soon.

2) These are short-term loans

Since these are short-term loans, you don’t have to confront the issue for quite a while. These loans are intended to enable you to help your financial issue for a short time. It is comforting to realize that you won’t be in debt for long. However, the vast majority tends to trust that you’ll arrive up in a major mess if and when failing to make your commitments; you should realize this isn’t genuine more often than not. The moneylenders offering payday loans do understand that there will be a few defaulters, and they have as needs be designed their plans. Rather than making some other move, they will simply restrict the client from using the office later on.

3) Good chances of getting the loan

Your chances of getting a loan from the organizations offering payday loans are surely higher when contrasted with other financial institutions, similar to banks. The reason is that payday loans are accessible for little measures of cash, for shorter periods of time. Since the moneylenders understand that the related risks are little, they can give financial help to a bigger number of consumers.

Organizations offering payday loans are surely higher when contrasted with other financial institutions Click To Tweet

4) Clear Terms (but keep in mind that the fees might be huge)

All the terms of the loan, including the fees and the interest to be charged by the banks are apparently expressed already. So the borrower is all around educated on the sum he is at risk to pay back. There are no concealed charges. This business is presently profoundly observed and controlled because of the terrible publicity it has gotten before.

Maybe, now you can better appreciate the reasons that prompt individuals to patronize payday loans. Their advantages incorporate quick and easy availability, and if you understand how to best adventure these loans, you won’t be scared of using them.