People often do not understand how payday loans works. They start to invent numerous myths about payday loans. If one would like to take a loan by himself, it is better to reveal the truth about microbanking. If a person finds a reliable crediting company, payday loan will be very cheap. Microbanking was developed to help people to cover basic needs.
The more people use the service of personal loan service, the more myths arise. Here are the most popular ones:
- Payday loans are not regular loans. They are issued for everyone who needs money. It happened in the very beginning when a loans appeared. Today payday loan are regular loans. The main difference of payday loans compared to long-term loans is a lower sum of personal loan, lower percentage rate.
- A person does not have to present documents for apply for a loan. It is very wrongful perception of application process. Even to get 600 US dollars, a borrower will be asked to present quite considerable amount of documents. A person has to present an income statement, an employment contract and a credit score. Not everyone is able to get such documents.
- There is no fine for not paying a payday loan back in time. It is not so. Financial companies will penalise a borrower who does not return money in time. He will have to pay a body of a borrowing, interest rate and a fine. This way, a borrowing becomes very expensive.
- There is no loan agreement to conclude. Taking personal loan is not less serious than taking long-term loans. A person is asked to sign a loan agreement. This paper contains much important information.
- A person cannot take several payday loans at once. A borrower can apply for several loans from different financial companies. It is good to know that he has to inform each financial company if he has remaining payday loans. If a borrower takes too many loans, he will not be able to return a loan in time. Financial companies understand it.
- It is possible to get a loan having a low credit score. That is not the case. A credit score is very important to apply for a payday loan. A score is assigned by financial bureaus. If a person returns all loans in time, he will get a high credit score. If he does not, a score will be low.
These are the most popular myths about microbanking. One has to know true facts about taking a payday loan.