Have you ever found yourself in a situation where you need the money real fast and it can’t be met with your paycheck? That is a very common problem, especially now that there is a financial crisis that’s making things hard for us.
There are different means of finding the needed amount for everyone. You can borrow money from the people that you know for example. You can also get a cash advance from your employer. There are times however when these methods would not work out and we need other direct means of getting the money that we need. That is when we need a guaranteed payday loan.
The High Risk of Overnight Cash Loans
This sort of loan is dependent on the payment that you would be getting for your work. Its term usually lasts until the next paydate and the only requirement usually is that one should be employed for a certain period. The borrower will then be getting the money that he needs but the amount would have to paid back in full on the next payday or the terms of the loan extended to cover another period.
Normally the amount that can be borrowed under this type of loan is limited since it is very high risk for the payday companies to lend money. They are not getting any assurance that they can get the money back. Because of that the amount that they lend is limited to a few hundred per loan.
Guaranteed Payday Loans
This is where a cash loan can come in handy. Payday lenders are looking for individuals who have an income. Your income is the best guarantor for your small loan.
Failure To Pay Back Risky
Just like with other loans when a borrower fails to meet his obligations for the payment of the loan, the lender will then have some right over the security and take ownership of it in compensation for the loan.
That is just a fair arrangement for all parties concerned. The borrower can get a higher amount and lower interest and the lender would get some assurance that the money that he will be handing over would be returned.
Guaranteed or Not, Borrowers Should Beware
Whether sort term loans are guaranteed or not, borrowers should beware when taking out short term loans. The fact that they do not require a credit check should be the first warning sign already. That means that they are not discriminating when it comes to the lenders that they are dealing with. That has led some experts to say that these loans target low credit score individuals. They say that the easy way of taking out these loans is merely a kind of bait for hooking borrowers to become dependent on the loan.