What Are the Advantage of Online Payday Loans?

Americans are taking payday loans more than ever. That is mainly due to the economy which has resulted in many people being without jobs or not making enough money to handle their expenses. Short term lenders are popping out on every corner in most cities and State where such loans are allowed.

Some of States have a lot of restrictions and regulations regarding payday lending, which is driving many people to get payday loans online from reputable and trusted online lenders. Taking payday loans online helps customers avoid state regulations, saves them time from going to local payday store, and saves them hassle on paperwork.

Payday loans can be expensive as most payday lenders can charge average of $25 per $100 borrowed but they are still more affordable than utility bill late fees, bank overdraft fees, and credit card late fees. (See graph below)



This is the main reason where many Americans tend to apply for payday loans when they need money fast.

A study done by center for responsible payday lending, shows that majority of people apply for payday loans for the following reasons but not necessarily in that order.

1. Avoiding Overdraft Fees;
2. Paying Utility Bills
3. Paying Medical Bills
4. Money to buy necessary grocery
5. Auto repair bills
6. Cash for Gas for their vehicle
7. Pay when their vehicles have been impounded.
8. Pay for personal debt
9. Pay credit card late fees
10. Pay officials fees, such as DMV registration fees, tickets, etc.

It is noticeable that all reasons above mentioned are absolute financial emergencies that these customers encounter. According to same study, majority of people apply for payday loans as last resort where their other options are exhausted. Only a small portion of payday loan customers seem to get these short term loans for non emergencies or personal gain. And when applying for these loans, they prefer to apply for online loans because they are more convenient, and often they can get the amount of money they need in lesser time.

This is a guest post by Kristine Sauze, a financial writer.