Myth vs. Fact: Short Term Loans

Don’t allow yourself to be misled by some negative rumors you might have heard regarding payday loans, be sure to first get your facts straight. There are tons of articles online that will tell you how bad payday advances can be, but there are many other articles that explain what a great tool this is as well. If you are facing an unexpected financial crisis, and are considering a short term loan, it’s best that you know the difference between the actual facts and many myths regarding payday loans, so then you could be able to make an informed and educated decision.

These Types of Loans are Trouble

This is a common statement, especially from those who have run into issues with a payday advance loans. There might be truth in these kinds of statements, but you have to remember, like anything, if you don’t use the services of a payday loan wisely, you can find yourself in even more financial trouble than you started with.

You can easily avoid facing these sorts of problems if you use a loan reasonably. Never borrow more than you actually need, remember the loan must be paid back in a short term. Sticking to a budget and planning ahead with the use of a short term loan can help you stabilize your financial situation.

Difficult to Obtain

This statement is a flat out myth, modern streamlined procedures allow consumers to easily obtain loans. A quick online search will show you that most lenders offer online applications that only take a couple of minutes, some even make it easier for you and don’t require paperwork and faxing. The requirements you must meet in order to be approved for a loan are also minimal, requiring only proof of income, some form of identification and bank account information.

High Interest Rates

Another dual edged statement. Because of the extremely high interest rates associated with payday loans, these cash advances can look pricey. At the same time, because they are for short term use only, the fees associated with them are usually quite easy to handle.

Even with three hundred percent interest, a weeklong loan only costs twenty to forty dollars, which is affordable when compared with the long term interest of thousands with conventional loans.

Risky

Many people claim that getting an online cash advance is dangerous because you have to give out your bank account information in order to get a loan. While it is true that you have to give out this information, you also need to realize the security protocols and laws that govern such transactions.

The payday lending company will not be able to simply take money from you at any time, or they are risking themselves to the possibility of a lawsuit. All the information gathered by the company is kept in secure locations as well, providing safety and confidentiality to all customers.

No matter why you find that you need such a loan, it is important to know the facts from the myths of these services. Make sure to do research first, before you discount the viability of payday loans.