Quick payday loans can cause more problems than what they can resolve. Most people who have taken out a short term loan would agree that they became more financially troubled than ever after borrowing.
Cash Loans with Monthly Payments
A recent study has revealed a depressing fact. Many poor families use cash advance loans to pay for usual monthly expenses. In short, they fall back on them to boost their monthly income. It should not be done since a quick online loan can be expensive even if the payments are split into monthly installments. The study has revealed that almost 70% of borrowers use the loans for the purposes they were not intended for. Here are just some of those uses:
- Utility bills
- Mortgage payments
- Car loan payments
- Food purchases
The expenses are all recurring monthly payments. That means they should be covered regularly each month. If they have to depend on a loan in order to pay for those expenses, then that just means that they do not make enough money.
No Matter What Marketing Gurus Say
These results reveal a startling fact. When you read about the marketing for short term fast loans with monthly payments, they are mostly targeted at those who would only need a loan as a one-time solution. They might just need a quick fix because a payday is still a long way off. The truth is that most typical borrowers are those people who are constantly short of cash.
The Lender’s Profit
What is even more alarming is that direct lenders would actually benefit more if their borrowers became mired deep in debt. The more the loan is extended, the more profit a company would be making. This is one of the reasons why they do not place a cap on the number of times that a person can take it out. This is also the reason why quick payday loans have certain qualities that other financial products are lacking in. It is mostly about the ease of getting approval for a loan application.
Here are some of those qualities.
- No credit check required
- No teletrack needed
- No need for credit checks
- No additional documents to be faxed
The Fast Processing
Another great attraction of quick online loans is the fact that they can be processed quickly. Since they are handled on the internet, a borrower can count on getting the money that he or she needs on the same day. In some cases the borrower can even get it within an hour. This makes it ideal when a person needs cash quickly and is unable to get it from other sources.
The ease with which people can get a quick personal loan is a major problem as seen by experts. It drives many borrowers to use it even though they cannot really afford paying it in the long run.