3 Popular Myths About Quick Payday Loans Busted

3 Popular Myths About Quick Payday Loans Busted

Online media abound with negative stories about payday loans like high fees, low amount and debt traps etc. But if there is so much wrong with payday loans, why are so many people turning to it to tide over temporary cash crunch?

In fact most of these stories are based on some myths surrounding payday loans. Let's do some myth busting here so that people in need of emergency cash don't desist from taking advantage of such a simple cash solution.

Myth #1 High rates

If you take into account the annual rate, payday loans sure have high rates, but we are talking about just a few weeks' time or less (till your next payday). For such short time loans, the rates you pay anyway average around 15 to 30 percent over three weeks' period. In other words, if you don't repay the payday loan in stipulated time and roll over repayment over a long period of time, only then would you end up paying really high rates. Not otherwise.

Myth #2 Credit rating gets affected

Credit ratings can be affected negatively if you take excessive credit from a number of avenues. Since no credit checks are required to avail of online payday loans, there is no question of your credit rating getting affected.

Myth #3 Payday loans create a cycle of debt

This is certainly not true as payday loans are very short term loans and there are legal limits to the number of deferrals. This prevents this short term loan to become high interest long term loan.

I hope some of your long standing doubts about quick and easy payday loans have got cleared with this myth-busting post. These were some of the most popular myths. I will tackle some more of them in my next posts.

Online payday loans are in fact great way to tide over any emergency cash crisis no excessive document processing, no credit checks, and cash available in 24-48 hrs. The only thing one needs to do is be responsible and prompt in repaying the loan amount.

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