Say what you will about Millennials (and many people have), they’re joining a growing number of people around the world who are turning their backs on conventional lenders for payday or small dollar loans. As many as 42% of those born between the 80s and mid-90s are choosing alternative lenders when they need fast access to cash in the face of financial emergencies.
Maybe the world’s favourite scapegoat generation is onto something. Here are 6 reasons why these loans are a great way to bail yourself out when you need an instant solution to your cash flow problems, whatever age you are.
- Lenient Eligibility Conditions
The most common reason why these loans are gaining in popularity is their simplicity. It’s incredibly easy to apply. Unlike conventional lenders that need an exhaustive review of your finances and credit history, these lenders require very little information. You don’t need an excellent credit rating in order to apply. In fact, the typical small dollar lender is only interested in knowing you have a stable job that pays you enough money per month in order to repay the loan. Whatever information you provide will be verified, but their focus is ensuring you can pay back what you owe — not what credit score you have.
- It’s Easily Approved
Convenience and speed are the name of the game when it comes to these financial products, so you can expect your application to be approved quickly. In some cases, same day approval means you can have the money you need in as little as one hour after approval. This makes them ideal for when a bill, prescription, or repair job demands quick payment. Compare this process to the bank’s methods; it’s not always obvious when you’ll hear back from the bank about your application.
- A Seamless Process
Non-traditional lenders have streamlined their practices on both sides of the application, eliminating much of the bureaucratic red tape you encounter at the bank. That means you don’t have to submit a lot of supporting documents with your application. It also means the lender needs to go through time-consuming levels of approval process before you receive the cash advance. All you need to do is submit a piece of ID and proof of income. Once this information is reviewed, verified, and approved, your account will be credited with your cash advance in no time at all.
- Low APR
Some critics of small dollar loans claim these companies charge a high annual percentage rate (APR) on their products. In reality, it’s a misconception as these products are designed to be a responsible financial tool. As more financing companies enter the marketplace, increased competition will regularly cap APR on these products. Take note, however, the APR will vary depending on your borrowing period. If you look for an extension on your terms, the APR will increase accordingly.
- Personal Data Is Kept Confidential
Due to the nature of their business, these financial companies are responsible for the personal information (PI) of millions of people around the world. There are privacy laws that make it mandatory for these companies to collect and store your PI in a certain way. Your personal details and other confidential information will be protected by a robust data security system that prevents this information from being shared or discussed with any other person. Data encryption systems are in place to prevent unauthorized access to your profile.
- A Huge Selection of Providers
As the need for these products increase, the number of companies offering these loans will grow to meet demand. As of right now, there are over 450,000 of these lenders in the United States. Meanwhile, there are at least 1,200 locations in Canada (a number last checked in 2004), making it easy to locate a store that can help. They’re also expanding their presence online, so you can learn about payday loans online should there not be a brick-and-mortar business in your neighbourhood.
Now that you know the advantages to using these products, you can understand why so many people are applying for them. Millennials, Baby Boomers, and any other generation: remember how these products can help the next time you face a difficult financial situation. Whether it’s unexpected but unavoidable travel, a sudden death in the family, or a costly repair to your car — whatever it is, these loans can solve your problem quickly and efficiently.
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