Payday loans can be your choice to meet your short-term financial emergencies, but you should keep in mind the pros and cons of the loans before choosing this financing option.

Pros Of Instant Payday Loans:

Simple application process:

Unlike banks, instant payday loan applications are easy to process. You can do it within minutes. Banks may take days to process it for you. So these are the best choice when you are in urgent need of money. The process is also simple, you don’t need to have to go anywhere, just open the application on your mobile and lend the money.

Fast funding:

When you are approved for the loan, you will receive it very soon in your online wallet.


Low or no credit check requirements (guaranteed approval)

Some lenders don’t look for requirements at all, others who have certain requirements are still soft. The requirements are not as much as the traditional banks do have, and poor credit can’t stop you from being approved. Keep in mind bankruptcy etc, can lead to the disapproval of the loan.

Cons Of Instant Payday Loans:

High-interest rates:

These are high-interest-rate loans. You will have to pay a good amount of interest for a short time of money. For instance, in Chicago, the annual percentage rate (APR) is approximately 400%. It is therefore suggested to lend money only if you can repay on time otherwise you will get stuck into it.

Short repayment terms:

These loans are not like ordinary loans that you have to repay over years. Here the duration is set for a few weeks or maybe months. So it creates difficulties to manage repayment within a few weeks.

Debt Cycling:

As mentioned above, the duration for repayment is less and the interest rate is high, which makes it difficult during repayment, and if you won’t pay on time, lenders will charge extra fees, making a burden on you. This situation can turn into a cycle where you will not be able to repay the increased value each time.

Their targets are low-income communities:

These loans are availed by low-income communities, where they run out of balance and look for some finance. When it comes to interest rates, it is very difficult for such communities to repay.

Access To The Bank:

Often the lenders ask for access to your bank account in terms. They do so for auto repayment. This is an insecurity for the borrower. Unexpected transactions can be done by such agreements.

Lenders Can Take You To Court:

If you are unable to repay within time, lenders can go to court. Though for small dollars spending time and money is not expected, some companies threaten the borrowers with such legal rights. Also, remember these are short-tenure loans while signing the agreement.

Credit Is Not Built:

In instant payday loans online guaranteed approval, lenders generally don’t report to the bureau, so no credit is built. If you build credit it helps you with high-quality financial products and low-interest loans.


Though instant payday loans are easy and instant, these have some cons as well. Keep everything in mind before applying.