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Cash Advance Agreement – Important Details to Take Note Of

Cash Advance Agreement
If you have experienced getting a payday loan or a cash advance from a lender or financial institution, you will have come across the cash advance agreement or loan contract. Whether you apply via online or submit an application to a payday loan store, you will have to sign a loan agreement or contract. 

This agreement or contract is an important document for both the lender and the borrower, and it serves as protection for both parties involved in the loan transaction. It is very important that both parties understand everything that is outlined in a contract. As such, a loan agreement should never just be some piece of paper that is blindly signed and kept hidden away in your desk.

Most borrowers do not even bother to read their cash advance agreement or loan contracts, often immediately jumping to the last page and signing in the space provided. The only thing that matters to them is how much and when they will receive their money. This is a common mistake of borrowers, which can often lead to misunderstanding and surprises on their part. Cash advance lenders should also emphasize the importance of the loan contract and must therefore explain and inform their customers of the contents of the loan agreement.

Interest Rates and Fees

A cash advance agreement should contain a list of the interest rates and corresponding fees for your loan. You should also find the Annual Percentage Rate (APR) that is disclosed when signing any financial forms.

Another thing that you should need to check is the exact amount in dollar value that you need to pay for the loan advance, which should already include the rates and fees. Information or details for bounced checks or late finance charge fees should also be included in the loan agreement.  This will serve you as a reminder to pay your loan on time, or you will have to deal with the additional fees. In cases where you cannot make the payment on the due date, you should discuss renewal terms with your lender so you can work on paying it without the additional late fees. 

Payment Terms and Commitments

It is your obligation to pay back your loan on the agreed upon date outlined in your cash advance agreement. Normally, for cash advance payday loans, you should pay your debt on your nearest payday (with a maximum of 30 days allowed). However, there sometimes can be an option for the borrower to take several weeks in repaying the cash advance amount. Whatever term is agreed upon between you and the lender, it should be written down and explicitly stated in the cash advance agreement

In the cash advance agreement, a repayment schedule provides an atmosphere of trust between the borrower and the lender. Detailing the exact amount on monthly payments, indicating the final payment due date, and stating the fixed interest rate on the loan amount will help the borrower to budget the funds accordingly. This is also a way of making the borrower responsible for meeting deadlines and fulfilling obligations as stated in the contract. As this happens, the lender may also be inclined to lend the borrower additional loan amounts in the future. 

Make a Deal
The late fee provisions in the cash advance agreement also allow the lender to plan any steps or recourse just in case borrowers become irresponsible when they make a loan default. This will also allow the lender to experience no unnecessary expense on their part.  

There is a sample cash advance agreement form with a specific statement that says you cannot be put on trial in criminal court for reasons of not paying your loan obligation. This simply means that you cannot be arrested for non-payment of the loan, but you can be tried in civil court. This specific line serves as a warning for borrowers that if payment is not received on time, then it can cost them more because of the court fees. It can also bring a lot of hassle to you because court can administer actions that can garnish your wage or place lien on your assets to ensure payment to the concerned party.    

When Not to Sign a Cash Advance Agreement

Before signing a cash advance agreement, it is very important that you read the fine print. Always check if all the important details are included in the list, and seek clarification of all uncertain terms that are written in the document. If possible, you can discuss it with a lawyer to interpret it for you.

If you disagree with the terms in the cash advance agreement, then it is your right not to sign it.  By signing the cash advance agreement, it means that you completely understand and agree by the terms. If there is anything in the document that you want to discuss with the lender, you must do it first before signing the agreement. In the event that things do not work out for you and the lender, then it is best to look for a loan company that you would be most comfortable dealing with. Always protect your right and do not force yourself to sign in the agreement if you are not comfortable with the terms. 

Another thing that you should verify is the contact information for your lender, which should be included in the cash advance agreement. There should be the company name of the lender and an address, toll free phone number, fax number, and email address. If such information cannot be found in the contract, it might be a shady lender or company, so validate it and ask for the other party to revise the agreement to include it in the writing

To recap, the cash advance agreement details the loan information regarding the rates, fees, payment terms, penalty fees, and lender’s contact information. It should also include the cost impact for the borrower if the payment is not settled on time. Since this is a binding and legal document, all the terms and topics should be covered and understood. If you are having difficulty understanding a section of the contract, talk to a lawyer who can best explain the terms because legal representation is always the best option in fully understanding the document.

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