Cash crunch? Not a problem anymore. Startups are launching to help you tide over cash crunch at the end of the month. Young employees living in cities like Bengaluru face severe monetary deficit at the end of each month. Now, you have startups that can help you get loans until you get your next salary. This type of loans is called payday loans.
So no need to live off of mayonnaise and bread, you can tide over this time easily with the help of payday loans.
Payday loans a new sensation?
The process is what makes it lucrative. Now all you have to do is present some documents. But most of it is online now. Even the service providers shall come to your home at a specified time to get your signatures. You will just have to upload some details about yourself.
The ease of availability is what makes it more feasible to accept. When you are facing a budget crisis you don’t want to go through a lot of red-tapisms, right? Hence, these loans are making it feasible for you to obtain loans right now.
Interest rates are flexible
The next big thing is the interest rate which also is superbly flexible in this case. Typically the loans are sanctioned for 5 to 30 days and for each day you have to pay 1% interest. Now, this may sound like much to some, depending upon the salary.
The reality of the scene is that each of the persons living in the big city either shares room with their roommate or lives in a mess. The cost sharing is what makes this an easily available option for many.
Payday loan market rises
Youngsters find it a good option for availing short holidays or buying that latest mobile phone. The only criteria are that you need to provide verified documents showing that you are a salaried employee.
The market for payday loans is estimated to be around Rs. 70,000 crores or $10.27 billion in the country. By the end of 2017, it is expected to touch $14 billion. This, coupled with the fact that the newly opened startups are using disruptive technologies, has led to higher market growth. The lower-grade technology implementation has made the startups gain more profits from the market.
The need for money was never higher than it is now. Especially around demonetization, the payday loan providers received a sharp hike in demand. The CEO and Co-founder of EarlySalary.com said that they sold out on the first day of demonetization. Since then inquiries have risen too. Today they have 8000+ customer base.
Pros and Cons of Choosing Payday Loans
Pro: One of the biggest advantages of choosing payday loans is the fact that banks never provide such loans. Credit cards also come with higher interest rates. Hence this is a midway and therefore a big plus for the consumers.
Con: Payday lending markets are known as predatory in countries like UK and US. If not careful, one could burn a hole in his pocket quite easily with this type of borrowing.