Payday loans are quick. They do not require a long drawn-out process to apply, and with minimal requirements, they come as the handiest option in times of instant cash needs. Also known as ‘instant money‘, ‘check advance loan’, and ‘deferred deposit loans’. They are infamous for their terms and interests, and yet the fact remains that they are borrowed on a large scale and constitute a rapidly growing industry worldwide. Payday loans are often perceived as a debt trap, which can actually be true if you don’t have your research done right since they weave a complex trap of interest over the smallest of loan amounts. There are some categorical facts about payday loans that you need to know.
They are fast
Compared to typical bank loans which require a series of documentation and operating procedures, payday loans by Quiddi Compare can be issued as fast as in 15 minutes. This is one of the major reasons people borrow these loans, since they provide immediate support in financial emergencies.
They have a short term
Payday loans are granted on short term basis. They are fast lent and fast returned. Usually, the payday loan is due on the next pay day after the loan has been granted. This implies that their term can be as long as a couple of weeks and as short as the very next day.
They are small, yet charge high
Payday loans are usually small, amounting to around $350. But their interest margin may go as high as 1000%, which makes the total amount due increase multiple times in contrast to the actual amount borrowed. Interest rate is fixed in advance and increases on each nonpayment.
They are usually paid back in full
Payday loans are generally paid back in full, including the actual amount borrowed and the interest as service charges. Yet in some cases, the lender might agree upon a payment scheme.
They are a booming industry
The payday loan business is one of the fastest growing industries worldwide. Although it has been some 20 years since the concept of this type of loan orginiated, in the early 90s, statistics show an incredible increase in their annual loan and revenue generation.
They can be addictive
Someone who has had the experience of payday borrowing is likely to borrow it again. Payday loans can be addictive because they fulfill your need in a jiffy and the lending companies constantly seek for the ways to retain their client base by luring them in through offers and packages. Statistics reveal that around 90% of overall payday loans are generated through regular borrowers, acquiring an average of five loans per year.
They have a global outreach
Payday lending has worldwide operations. From Europe to America and Asia to Australia, payday lending industry has spread its network over 35 states globally, over a time span of two decades. With an extended nexus of around 22,000 payday lending spots, the amount lent annually is reaching an all times high, estimated over $27 billion.
Payday loans may appear simple and easy, but the associated facts illustrate a more complex picture. No matter how critical the situation is, it is a good idea to get your facts straight before opting for payday loans.