Cash advances have grown in popularity over the years. Although there are more types of loans available, most people in need of quick cash gravitate towards prepayment loans. Despite the warnings about these types of loans, people don’t stop using this to make extra cash during tough times.
This trend in the credit industry has become popular for a reason. Here are reasons people turn to prepayment loans to help them out in financial distress.
Easy access to quick money
In emergencies, people in need of quick cash resort to cash advances for help. It’s a perfect solution when you need instant cash. Most prepayment lenders promise quick approval and release cash within 24 hours. There are also prepayment lenders who can entertain borrowers 24 hours, seven days a week. Compared to traditional loan options, applying and processing your application can take some time.
Another added benefit that a prepayment lender gives its borrowers is the lower requirements they have when compared to other loan options. Prepayment loans only require four simple requirements from you when you apply for one. These requirements are:
- You must be at least 18 years old.
- Proof of identity such as government issued ID or SSN.
- You must have a stable source of income, e.g. B. a regular job or a well-established company.
- Active checking account.
These requirements may not be difficult for you to acquire as you may already have all of the requirements before you start planning to get an advance loan. It is best to prepare everything in advance to ensure that your application is expedited. You can look it up Creditninja.com to know what general requirements you need.
No credit checks
More and more people are choosing to apply for a prepayment loan because the prepayment lender doesn’t care about their borrower’s creditworthiness. As long as you have a stable income and can pay the principal amount you borrowed plus the interest rate, you will likely be approved.
Most people with bad credit in need of quick money resort to prepayments to meet their needs. Here you can get additional money quickly and easily. Although there are more loans available for borrowers with bad credit, the prepayment loan is the fastest among them all.
A cash advance is a short term loan because you will have to pay the amount you owe on your next payday plan, which is why it is also known as a payday loan. When you purchase a prepayment loan, you simply take your next salary up front and with an interest rate.
On your next payday plan, make sure you pay the amount owed plus the interest rate. After that, you no longer have any obligations to the lender for prepayments. Plus, you’ve built a good relationship with the lender that you may or may not need again in the future.
Higher approval rate
The majority of people who applied for an advance were approved and their funds released within 24 hours. As long as you qualify, there is a good chance that you will be approved with your application.
Less likely to affect your credit score
Compared to traditional loans or credit cards that require you to pay the amount you owe over an extended period of time, there is a higher risk of uncertainty arising in your finances. These missed payments will then affect your credit balance and lower your score. On the other hand, an advance payment is required to be paid once and within a few weeks of releasing the borrowed amount.
Because of all of the above advantages, people nowadays prefer cash advance loans over the other alternatives. However, always remember that you should only resort to this loan option when you need extra cash for valid purposes. Prepayment loans should not be used to finance unnecessary expenses.