Contrary to the belief that payday loan seekers are generally the people with low income brackets, 2010 market research by the Personal Money Market shows that the average payday loan borrower earns more than $45,000 per annum. Online payday loans are offered by lender to the debtor on the basis that latter has a stable job and s/he will pay off the loan with the next salary. So, the higher your monthly salary, the higher amount of loan you can get from such lenders.
Features of Online Payday Loans
In order to understand the positive and negative points of online payday loans, it is important to throw a glance at its salient features:
Online payday loans are a boon for those who are caught in unforeseen debts during a month. People with high social obligations are commonly subject to such financial burdens. With the help of this ready loan facility, they can save themselves from falling under the permanent debt trap.
- Short-term in nature: These loans are short-term by nature and are intended to relieve you of unexpected financial burdens. Hence, you can pay off the unavoidable expenses, such as school fees, car repair, grocery bill or dental visit, without waiting for the arrival of your monthly salary. Hence, these loans are a perfect means for short term credit relief.
- Better than loan on your credit card: Through online payday loans facility, you can get cash despite your bad credit history. Moreover, any cash advance on your credit card will keep on accruing interest until your whole balance is paid off. It means you will continue to be burdened by the interest slabs every month. So, do not fall into the trap of loan against credit card. Instead, apply for payday loans as they can assist you in urgent situations without burdening you with heavy interests.
- Your salary serves as a security for payday loans: These short-term loans are meant for your special needs that crop up in the middle of month. So, these are given not against any mortgage or other securities but your next monthly salary. An agreement is held between you and the lender according to which you will pay off the loan with your upcoming monthly pay cheque. Or the other way, your employer can also directly pass the cheque on your behalf to the lender as per agreement terms.
- Minimum paper work: Unlike other loan options, such as bank loan, credit card loan and mortgage loan, you do not have to undertake a lot of paper work while applying for online payday loans. All you have to do is to log on to the lender's website and fill out the required form. There is absolutely no need of submitting any papers or faxing any documents. Within a stipulated time of submitting the online form, you can have the requested cash at your disposal.
- Cash advance up to $1500: As these loans are granted against your salary, their value generally is limited up to $1500. For anything above than this, you have to produce relevant salary slips and ask for special privilege.