Payday Advance Cash
Payday Advance Cash
When a paycheck comes later than an employee may need it, he or she may avail of a payday advance cash loan. This kind of loan offers an advanced salary payment of sorts, where the person may pay back the payday advance when he or she gets her salary on the usual payday. A person may avail of a payday advance cash loan in order to complete financial obligations or debts that have accumulated before his salary is made available.
With that in mind, a short term loan of any kind should always be taken out with caution, as interest rates in these kinds of cash advance schemes are designed to be exorbitantly high as the loan remains unpaid. The substantial risk posed to the lender can often be the cause of these high interest rates, especially with the short term nature of a payday advance cash loan. If you are comfortable with the risks, however, then carry on in taking out a loan like this.
How To Apply for a Payday Advance Cash Loan
Taking out a payday cash advance can be as simple or as complicated as any kind of loan you would normally take out at a bank or lending institution. Verification of employment, your credit ratings as well as other criteria must be met before a person is allowed to take out a payday loan, but the process can vary depending on the place you choose to get a loan from.
Traditionally, borrowers visit payday lending stores to secure small cash loans that are usually repaid on the borrower's next payday. A postdated check is typically issued to the lender which lists the full amount as well as other additional fees involved with taking out a loan. The borrower is then expected to return to the lending institution in person in order to repay the loan in full, but if the person is not present, then the lender may redeem the postdated check.
If the account of the borrower does not contain enough funds to cover the expense listed on the postdated check during the maturity date, then the borrower may rack up a penalty for a bounced check. This penalty may include the cost of the loan in addition to the penalty, as well as penalties imposed on the part of the lender because of the borrower's failure to repay the loan on time.
With the widespread implementation of the internet and online forms for shopping and banking, consumers may now avail of payday advance cash loans online. There may also be additional steps to go with an online loan application, such as having certain documentation scanned or faxed to the loaning institution before a person is even considered for a loan.
When a person is approved of a loan, a direct deposit to the borrower's bank account may be done by the loaning institution, with the finance charge and loan repayment done electronically when the borrower's next payday rolls around. Some lending institutions who do business over the internet may not require credit checks or other kinds of verification in order to give payday advance cash loans.
Risks in Payday Advance Cash Loans
With any kind of loan, a person must exercise caution and planning in order to pay back a loan on time, as not to incur any additional fees which are added when a loan is payed back late. With short term loans like a payday advance, interest rates may be significantly higher than other kinds of cash loans due to the short span that the loan is to be payed back. Being late with one payment can eventually snowball into long periods of indebtedness.
Some states also do not regulate or oversee institutions or other businesses that offer payday advance cash loans, so it can be easy for more shady loaning businesses to hoodwink honest customers or add on unwarranted and hidden fees. A loan debt trap can put a person into a lifetime of debt at worst, so it can be very important to check with your local government office about loaning laws in your state or city.
Some states such as Massachusetts have highly regulated Laws that prohibit loaning institutions from placing excess interest rates above a certain annual percentage rate have also taken effect in some states, but payday lenders may have found loopholes in local usury laws in order to continue to provide payday advance cash services to potential borrowers.
Laws limiting the number of loans a borrower can take out at a single given time can also protect a borrower from potential debt traps. Real time databases kept by government offices also keep track of loaning institutions, especially larger ones established by banks and larger businesses that deal with other peoples' finances for potential violations and crimes against consumers. The Federal Truth in Lending Act will require financial institutions to disclose any and all fees that relate to a loan, so be sure to read the fine print.
Depending on where you look for a loan, taking out a cash advance can be a painless and straightforward experience. However, be prepared for anything when deciding on a payday advance cash loan so you do not end up in a lifetime of indebtedness to a loaning institution.