Government agencies and private institutions have been giving out warnings against the use of instant loans. Their main concern is the fact that online loans even from a legit company can trap people in a never-ending cycle of debt.
The main reason why cash loans could be a problem is because the borrowers are forced to prioritize their payments once it turns out they have borrowed more than they can handle with little money left for other daily needs. They are then forced to borrow again to satisfy those needs. This could herald a cycle of debt which for someone with a limited income would be hard to get out of.
The Borrower’s Profile
This problem is made more acute by the fact that typical borrowers applying for instant payday loans are people with bad credit standings or a limited income. They usually resort to payday loans with no credit check to supplement the limited means they have. Since the terms are very short, lasting a few weeks only, their financial situation would stand little chance of improvement the moment that they borrow. With most of the money from their paycheck going towards the payments too little is left for their daily needs.
The borrowers are left with very few options. They cannot go to the banks because they would be refused in view of their bad credit standings. Other lenders would probably not accept their applications either. They are forced to borrow money from legitimate lenders despite very high costs. However there are some advantages of payday loans with no faxing as well.
- There is no credit check
- Payday loans are faster to get than any other financial product
- There is no faxing involved
- The application process is very convenient since it is done online
In reality, there are always some options left to try the only problem being that they are not as easy to get as payday loans with no credit check and no faxing. Why bother with strict requirements and lots of paperwork when you can get the money you need on the Internet in no time at all? Here are some alternatives that you ought to try out first:
- Some banks are starting to offer short term loans now
- Credit unions have excellent terms and conditions that are favorable to the borrower
- If you need the money to pay off an upcoming bill, try to negotiate with the creditor first
- Borrow from someone that you know
- Try to earn the money you need by selling something or by taking up extra work
- Find out if you can get a cash advance from work
These options are a lot harder to do than applying for a loan on the Internet. If you do it properly though then you would avoid having to pay high interest on what you had to borrow.| Online loans from direct lenders »