Sometimes, people face cash shortages until they are left wondering how to get the money they need quickly. The emergency could be related to a sickness, an accident, or a pressing bill.
Payday loans are suitable for emergencies and not to meet the regular needs. Despite that, they attract higher interest than pawn loans, and they are still a better choice for many people. This is what makes payday loans better than pawn loans.
Easy to process
In many cases, payday loans are applied for and processed online. In other special circumstances, further evidence may be needed. Many people applying for payday loans are only required to complete the application form with the required details.
As opposed to the pawn loans whose application and processing are time-consuming, with payday loans, you can have your money the same day. Pawn loans involve long and tedious processes due to the need for collateral. With payday loans, details are not disclosed to the third parties, and the lender can use them to make quick decisions.
Through a good money lender, you can fill the loan application form within minutes and receive instant notification about the loan approval. Whether you need money for an overdue bill or other emergencies, online lenders have made access to payday loans much easier and convenient. To find more about the process, read more at Personal Money Store.
No need for collateral
Payday loans are accessible without collateral security. It is available to borrowers primarily based on their income and their next payday. Even if the interest rate is high, you don’t risk losing valuable assets.
Pawn loans are always secured, and therefore, in case you default, you risk losing the asset you used to secure it. Even if the asset is sold at a higher price than the loan balance, you cannot be reimbursed any amount.
Creditworthiness is not required
If you have a poor credit history, it may be difficult for you to borrow. Most providers, including the pawn loan brokers, assess your credit history before advancing you a loan. Payday loans are available to people with poor credit ratings.
Loan companies do more stringent affordability checks but they compensate themselves by raising the interest rates. If you are salaried, are in a position to pay the loan and regardless of a loan you defaulted in the past, payday loans can help you deal with emergencies.
Payday loans can help you to save money
Overdraft fees, default fees, and bounced checks can pile up and get overwhelming. By taking a payday loan to cover such expenses, you may reduce the total amount that you are required to pay. However, you should consider this option only if you are certain that you can manage to repay the loan on time.
If you are about to miss your credit card repayment, the loan can help you to save on penalties that may accrue. You should compare the cost of borrowing with the amount that you expect to save as a result of borrowing. Thanks to the Financial Conduct Authority (FCA) that protects customers against exploitation by payday lenders.
Suitable for emergencies
If you have an emergency, it will not make any sense to apply for pawn lawns that involve tedious processes like valuing the collateral. If your boiler needs replacing or you have a sick family member, you cannot wait for loan approval for a long time.
A payday loan requires filling in the online application form, which can save you a lot of time. The money lenders can evaluate your application and, if approved, advance the loan the same day. Most lending decisions are made within minutes and money sent to the account of the borrower immediately after a successful application.
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