The Latest Fad Called Payday Loans

By: Ajeet Khurana

Payday loans are all the rage in the world of today. As the world of personal finance continues to grow, newer and newer loan types have been coming to the forefront. One could say that it has become fashionable to avail of more and more loans. These days, we all look to loans when we want to fund our college expenses. We look to loans to help us when we are buying yet another car. And the mortgage is our best friend when it comes to purchasing a house. Loans are the fuel that has become the drivers of modern world. Loans are helping us to live much better by allowing us to purchase things which would otherwise have remained in the "unaffordable" category.

In the old days, people turned to loans only after all other means had been exhausted. These days, loans are a person's first choice. And rightly so. They say that money can ruin relationships forever. At least loans remove that possibility. The loan amount that you finally secure depends on your credit score. It does not depend on how close you are with your lender. It is a contract which comes with well-defined consequences. If you repay the loan on time, you need not worry about defaulting. If you don't, you could land up with a bad credit history. This would adversely affect your future loan prospects.

Now that I.O.U.s to friends have all but disappeared, we are being witness to the rise of payday loans. These are typically short term loans that can be procured on the basis of documents that prove one's status as a full-time employee. Such loans tend to be easy to get as loan providers do not need too much documentation prior to giving you the loan amount. Most often, they do not even ask for your previous credit records. That is a blessing for those who have a history of bad credit.

On the flip side however, one has to end up paying rather large amounts of interest compared to other kinds of loans. That single factor may encourage you to decide against payday loans. However, what you need to keep in mind is that because these are short term loans (ranging from two weeks to thirty days), the interest amount should be quite manageable. However, if you still happen to default on payment, it will turn into a noticeable mark against your credit history.

There is nothing wrong in securing a payday loan when the situation demands. But promise yourself that you will make timely repayments.

Payday Loans
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