Payday loans have emerged as a significant form of personal borrowing. In fact, young borrowers are more likely to get a payday loan than a home loan or any other form of traditional borrowing.
Whether you’re a college student or a single parent struggling to make ends meet, payday loans are an option you should certainly consider. Like everything else, payday loans have their set of pros and cons. But in a rough financial spot, the benefits definitely outweigh the drawbacks.
Here are the top reasons why taking out payday loans in South Africa is a suitable borrowing option.
Unlike a traditional loan, getting approved for a payday loan is quite easy. Even if you failed to repay a loan in the past, there is a high chance that you will still be eligible for a payday loan. Payday lenders will take a look at your current ability to repay, and you’re good to go.
No Credit Check
Do you have a poor credit rating? This can prevent you from getting a traditional loan but not a payday loan. A high credit score isn’t necessary for a payday loan. However, it’s important to note that the inability to repay a payday loan on time will adversely impact your credit score. So make sure you pay it back on time.
Fast Processing and Transfer
A payday loan is an exceptional borrowing option if you’re in any sort of emergency situation. Whether you need to pay utility bills or unexpected medical expenses, a traditional loan has a lengthy application, processing, and transfer process. For urgent requirements, payday loans are the fastest borrowing alternative out there. Usually, payday lenders can transfer the funds within the same day!
If you just need some extra cash to pay a few bills, then a conventional personal loan isn’t the ideal option. Typically, you have to borrow a minimum of R3 000 in case of personal loans, but what if you don’t need that much cash? Borrowing more money than required implies paying more interest, which can be avoided with payday loans.
Payday loans offer the added advantage of borrowing exactly the amount you need, which can be as small as R 500.
Applying for a traditional personal loan may seem simple, but it involves a lot of paperwork and running around. In comparison, payday loans offer much simpler requirements. You can apply for a payday loan, get approved, and receive the funds, all within the same day.
No Need for Collateral
When you take out a home or a car loan, the asset purchased becomes the collateral. In case you’re unable to repay the loan, you risk losing your home or car. Is that kind of risk worth taking when you’re in a rough financial spot? Fortunately, payday loans don’t require any form of collateral. Even if you don’t own an expensive asset, you can borrow from online payday lenders.
As previously mentioned, applying for a traditional bank loan is a tedious process. And if you’re in an emergency situation, you may not have the time to go to the bank and negotiate a loan.
Payday loans are completely online-based. All you need is a computer with an internet connection, and you’re all set.
Often online payday loans are available for 24 hours, seven days a week, making it one of the most convenient ways to borrow.
The Bottom Line
As payday loans are virtually online-based lending, it’s important to do your research for choosing an authentic lender. If the website looks suspicious or the lender is implementing strange conditions, it’s a red flag, and you should move on to a trusted lender.