The Benefits of a Payday Advance Loan

Everybody gets strapped for cash at some point in their lives. People in this situation should consider applying for a payday advance loan. These loans were created to help people get through financial emergencies.

Why Should People Take Out Payday Loans Over Regular Loans?

In the past, the only options borrowers had were credit cards, overdrafts and personal loans. While these products have their benefits, they also have drawbacks.

7Credit cards are not ideal as they are what lenders call “revolving credit”. This means that people can borrow money, pay off the borrowed amount and then borrow it again. This creates a cycle of debt that is difficult to break.

While personal loans can be good products, they are hard to obtain. Banks tend to prefer customers that are earning a high income, have low debt levels and a clean credit rating. People who do not fit into these categories may find that their application is declined. Not to mention, bank loans can take weeks to process.

The Benefits of Payday Loans

A payday advance loan is a quick and easy loan that people use for unexpected expenses. Listed below are some of the advantages of payday loans.

1. The loan application process is quick. People can apply for a loan and have it paid out within an hour. These kind of processing times are unheard of in the traditional banking environment.

2. The customer can apply online instead of making a trip to the bank or completing a phone application.

3. Banks often require their customers to borrow a specified minimum loan amount. With cash advance loans, borrowers can take out as little money as they wish.

4. The term “payday” is used because the lender expects the loan to be paid off on the borrower’s next pay cycle. In reality, lenders give borrowers approximately 30 days to pay off their loan. The advantage of this is that borrowers will not have debt hanging over their heads for the next 6 months.

5. Payday lenders accept almost all loan applications. The only times they will decline an application is when the borrower is under the age of 18, unemployed and/or currently bankrupt. As lenders do not perform credit checks, these loans are suitable for people with bad credit.

6. All fees and interest charges are disclosed up front. Due to their high interest rates, payday loans have gotten a lot of bad press over the years. The end result is that the market is heavily controlled and monitored. Payday lenders are required to be transparent and clearly identify their charges. The benefit to the consumer is that they know exactly how much they will have to pay back without any hidden fees. See also CNN News

The benefits of cash advances outweigh their drawbacks. Borrowers who still have questions about payday loans should contact their loan company. Most companies will have customer service staff on hand to answer product related questions. These loans are best suited for emergency expenses such as car repairs and overdue bills.

Factors to Consider When Choosing an Online Payday Loans Company

Payday loans are short-term loans that come with less stringent requirements when compared to traditional long-term loans. Typically fast cash loans they are offered without upfront fees no credit check and no down payment. Additionally in most cases the loan money is available to the borrower within a period of 24 hours. When offered quick cash it can be quite easy to be tempted. However prior to deciding on whether to apply for online payday loans a potential borrow should ensure that they are capable of repaying the amount they intend to borrow.

When someone encounters an urgent monetary situation and is confident of their capability to repay a payday loan it is still vital to consider the options available. This may take some research and a little time. With so many lending companies out there the time used to research them is definitely well spent in order to save oneself from the likely hassles that can be encountered. Below are the factors to consider when searching for an online payday loan company.

Loan Rates

The rates for online payday loans vary considerably from company to company. While some companies may charge a flat and affordable rate of 15% other may charge a rate that is as high as 50%. Any payday loan company that does not clearly describe their rates should be avoided. If the company is unwilling to disclose the amount of loan rate until a would-be borrower is ready to commit to the loan agreement the borrower should take caution. Such companies usually charge hidden fees. A potential borrower should utilize a calculator when doing their research to find out the actual amount they will be charged based on the loan amount needed.

Loan Terms

Prior to choosing a lending company the terms of the loan should be put into consideration. Numerous payday loan companies specify that the loan is repaid in full on the coming pay date. Others can automatically extend the loan from payday to payday unless the borrower indicates that they wish to pay the entire balance in full.

Should someone choose a company that operates using automatic extensions they must factor in the additional fees required if they fail to repay in full on the upon agreed pay date. It is vital to bear in mind that while it may be tempting to extend the loan due date it is not a smart thing to try.

Rules and Regulations

Despite the fact that the rules may vary from one lender to another they are all governed by federal and state laws. Although one does not need a credit check to qualify some companies do have some expectations. A would-be borrower should know whether or not they are capable of adhering to the guidelines of the payday loan company’s guidelines prior to making an application. Although a majority of companies do not some ask for a deposit in order receive a payday loan while others usually run a credit check.

Trustworthiness

Potential borrowers should be cautious of online payday loans companies with quite low standards. A company that has standards that are too low speaks volumes about how trustworthy they are. A lender that approves a borrower’s loan application without any application or proof of ability to repay the loan such as a pay stub or a bank statement cannot be trusted. Just like the case of any lender the chosen online payday loans company should have a verification process and some guidelines. Companies that do not verify either are running their operations illegally or are a scam aimed at accessing people’s bank account details.

Predatory companies will in most cases encourage applicants to apply for the maximum amount of loan possible. As much as this can be quite tempting borrowing more money than a person can afford to repay is financially irresponsible. Such companies generate most of their revenue from the additional fees that they charge in the event that the loan is not repaid in full in accordance to the agreed upon terms. Click here to read more details.