In today’s fluctuating economy nobody is immune to the ill-effects of financial ups and downs. Your income is stagnant; in fact there are people who have faced a reduction in salary. However the cost of everything is rising day by day. Therefore your expense to meet your day to day expense is also rising.
This gap in income and expense gives rise to the situation of cash shortage. This becomes a crisis situation during the middle of the month, when last month’s salary is already spent and next day to come after several days.
During this period you face the hurdle of managing your expenses till your next payday. You don’t only need money to meet your basic needs but also need cash to meet any unforeseen expense.
In other words you need cash assistance of small amount for a duration mainly up to your next payday. At time you would like to avail loans for a little duration that means till say a week after your next payday.
It is for these needs, lenders now offer payday loans. These loans have been customized to meet the cash needs of small amount for short duration.
So let us sum up the reasons why people avail these loans. The most common factors behind borrowing payday loans are as follows:
Urgent need of cash: Most of the people face cash shortage during the middle of the month or towards the end of the month. Usually this is the period when you need only a small amount of cash but the cash required most urgently. This need is met by these loans because payday loans can be borrowed within twenty four hours. In some cases it can be offered within few hours only.
Cash needs of short duration: When you face cash shortage during any time of the month, you know that after few days, you would get your pay. So you look for a loan only till your next payday that means you look for a loan only for a maximum period of four weeks. In order to make these loans suitable for these needs, lenders offer payday loans for a period of up to 31 days that meets your criterion also.
Small amount of cash: Cash that you need during the middle of the month usually remains small because you need assistance only for your small needs. In any case you would get your salary after few days with which you can meet your other needs. Even otherwise when you need is small, you would not like to borrow loan of large amount. This criterion is also met by payday loans which makes it most suitable.
Convenience: One of the most important factors that goes in favor of payday loans is the convenience with which you can borrow these loans. Normally when you borrow a traditional loan, you need to prepare yourself for a complex process of application, supporting documents, credit verification, arrangement of collateral and so on.
However these are no such requirement to borrow payday loans. You don’t need to fax multiple documents to the lender to complete your application for loan.
No credit verification: As mentioned above, today’s economy is fluctuating to a great extent which has left a gap in the income and expense of most of the people. In other words, most of the people face financial hardship which is reflected in their credit profile. This creates hurdle in borrowing loans.
However payday loans can be borrowed by one and all without any differentiation on the basis of one’s credit profile. This is a great relief for those who have negative issues in their credit profile.
No collateral: Arrangement of collateral is another significant hurdle for most of the people in borrowing loans when they need cash urgently. However this hurdle is no more there when you borrow payday loans.