A Few Disadvantages of Instant Approval Payday Loans
Instant approval payday loans are now very popular among those who are facing an urgent financial problem. Because of the huge economic crisis that hit the world a few years ago and that seems to persist, numerous people feel a lack of financial balance at each and every single expense they were not expecting.
If the car has a problem, a relative is hospitalized as result of an accident, someone in the family marries without having said anything about this recently or a bill comes much bigger than you expected, it is clear that you face a financial problem. If you are one of the people who don't want to explain the financial problems you have to friends and family members and prefer not to take a no credit check loan from them, then it is recommended to direct your attention towards instant approval or same day payday loans.
The huge advantage of these loans is that they are quite easy to obtain and thanks to the fact that they are not huge, they can be paid back without too many problems. In addition to this, you can ask for a loan in the morning and already have the money in your account by the time evening comes.
Their speed is probably the feature that most attracts the attention of people upon these loans, but they also have their risks and disadvantages. One of the disadvantage of these quick cash loans are represented by the fact that they are more expensive than other types of loans.
These payday loan companies practice huge interest rates in order to make sure that if they lose the money they offered as a loan to some of their clients, the loss is not important.
An annual percentage rate of the instant approval payday loans is situated somewhere around 400 percent, which is a lot.
There are no other loans with such a high annual percentage rate, but since these bad credit loans are offered without too many requirements, it is easy to understand the fact that they are more expensive than other loans.
Another disadvantage lies in the fact that there are some people who don't fully understand what these loans are and how they work.
Even though a customer can't obtain too much money through a payday loan, as most companies offer a maximum amount of around $2,500, there are plenty of people who take more money than they can pay back thinking that they have plenty of months at their disposal to save money and cover the loan.
This is the big disadvantage, as there are rare cases in which the loan is offered for more than two months. Reading the contract before signing it will help you signal this problem and you can immediately correct the mistake by asking for a new contract and a smaller amount, but the problem is that there are plenty of people who don't read the contract and sign it directly.
Don't do this, as this is a huge mistake! It is important to always read all the paperwork and ask as many questions as you can think of.