Payday Loans: A Bad Habit or a Helpful Tool?

Payday loans are like smoking or any other bad habit – you know they take away from your well-being, yet you cannot live without them. This is what most knowledgeable people in areas of personal credit and finance say. It is true that payday loans are very expensive once they are converted to the traditional loan metric, and feature many other drawbacks, such as short borrowing terms and small loan amounts. All combined, such negative criticism should have pushed payday loans off the lending market.Payday Loans Popularity Is On the RiseWell, life proves them all wrong: payday loans are widely offered and are very popular. In fact, they have two major competitive advantages that other lending products do not feature: they are available to almost everybody, as they do not feature credit checks as a part of loan approval procedure, and they offer immediate funding - borrowers are often able to get cash right on the spot, or have the funds transferred to their bank account in a couple of hours. These two alone offset all disadvantages described earlier.Who Should Consider Payday LoansSeveral years ago many people with good credit may have their eyebrows move up should they hear about using payday loan services. Today, when banks have tightened their lending criteria while nationwide credit quality decreased greatly due to real estate market collapse and massive unemployment, many previous good credit borrowers find themselves in the position where their savings are drained and credit scores have taken a serious hit. Very often, a payday loan is the only financing they may be able to get, that is guaranteed. The nature of payday loan does not mean that it is only geared towards people with bad credit. Everybody who experiences temporary cash flow problems may benefit from payday loan services, regardless of their credit rating.How to Find a Payday LoanPayday lenders no longer sit in dusty cash checking booths. In fact, they are no less technologically advanced compared to major banks and large financing companies. The entire process, from initial contact and application submission to loan quotations, legal agreements, and funds disbursement may be entirely conducted online. Information technology, utilized by most payday lenders, eliminates a lot of hassle and expedites the process, as there is no need to make trips to a local lending office or fax over paystubs and ID copies. In addition, there are a growing number of lender matching services online that allow borrowers get quotes from multiple lenders and choose the best one.Things to Look Out For When Applying For a Payday LoanGrowing popularity of payday lending had caught the attention of criminals, who specialize in consumer rip-offs and identity theft. While online processing is great in many ways, it may present a serious threat to your well-being. There are a number of things you should always look out for. First, make sure that the lender you are dealing with is authorized to do business in your state and is licensed. Second, do not submit any sensitive personal information over unsecured connection. Last, always read the fine script on you loan agreement to make sure there are no hidden fees and charges.