Payday loans are very well advertised and can sometimes be a good option to cover emergencies. While we cannot say if a payday loan is right for you, we can say to be wary of fees. These short term loans can have huge fees. While Payday Loans online may be easy and convenient it may not be the best option.
In this article we are going to look at Payday Loans and Online Payday loans to see the pros and cons of these debt instruments.
What is a Payday Loan?
A payday loan in South Africa is a term used for a short term loan that only lasts a few weeks or even days. These loans are usually taken out during the month to be repaid when the person who takes out the loan is paid their monthly salary.
These loans are often used for emergencies or as bridging loans to help cashflow struggles.
Payday Loans Online are online payday loans that can be accessed through online lenders or online portals. This makes it easy and fast to get your loan when you need it.
Pros of Payday Loans Online
The pros of a payday loans, specifically payday loans online are as follows:
- Low Entry Requirements – The entry requirements are lower than traditional bank loans, according to our research.
- Fast and Easy – Being online, the service is fast and efficient and some lenders claim that the money can be in your account within a few hours.
- Some are available in Cash – Some lenders offer you the loan in cash.
Cons of Online Payday Loans
As with all financial instruments, there are some downsides you must take into account:
- High Interest Rates – The lenders often charge the maximum NCA interest rate due to the risk of these loans.
- High Fees – There are often multiple fees that add huge costs onto the price of the loan.
While payday loans online may not be for everybody, sometimes they can be helpful. Make sure you speak to a financial professional before making any financial decisions to ensure that the product you are getting suits your affordability, risk and needs.