Payday Loans: Facts and Fiction

A payday loan is a form of micro finance in which a financial institution lends money to their customer. The money is lent on short term conditions. It is meant for those people who find it hard to make both ends meets. This form of micro loan is exclusive for those who want to don some extra in life with little resources. While other things of life to worry about, it is very difficult to apply for a loan and go through a long process which is full of hassles and hurdles. The loan process is very tedious and complicated and so does the loan conditions. To make the matter worse additional hidden charges adds to the confusion of the clients. Whereas for pay day loan it is a matter of seconds. There is no queue, no long procedure for documentation, no interview and no requirement for credit history. As long as your are18 years old, has a job and holds a bank account you are eligible for payday loan. Mostly all financial institutions provide online loan facility, so if you meet the above criterion, you are just minutes away to money.

But there are also aspects of concerns associated with this form of loan. Since internet is not a much secured place, there is possibility that your information is being hacked and can be used for fraud purposes. There have been many scams related to this mode of micro loan. As there are no such hard and fast rules for verification, to get the loan, most of the applicants impose as somebody else with fake identification. There are cases of people who cheated these financial institutions with fake identification. Chances of frauds are also involved on the behalf of borrower. Many bogus financial institutions have cheated the people by charging them with processing fees and other charges. Another matter of concerns is the hidden charges and costs. Other things to be considered are the high interest rate because most of the financial institutions find this mode of micro finance very risky. It is always safe for both creditor and borrower to make a thorough research and go through all the details.

Payday loans are fast and convenient way to a hassle free and easy micro loan in heydays. If your are genuinely in situation where you desperately need some extra money then payday is a good option but it is advisable for you to be extra cautious for any fraud elements. In the end I would suggest that before making a decision keep in mind all the pros and corns of this mode of micro loan. Only avail this mode of loan when you desperately need the money.