A payday cash advance is a quick way to obtain money in an emergency. Many people are unaware of how a payday cash advance really works, and the advantages and disadvantages of such a loan.
How The Application Process Works:
A payday loan is very easy to apply for, it can be done in person or online. The potential borrower will need a few pieces of information for the company, in order to apply for the cash advance.
A paycheck stub that shows year to date earnings.
A verifiable checking account.
A verifiable address. A utility bill or cable bill in the potential borrower’s name will be required.
A potential borrower will need 10 to 15 references. These references must include names and addresses. The references are only contacted if the borrower defaults on the loan.
The loan company will verify all of the information that the borrower has provided to them. A cash loan will be offered after the verification process. The loans range from $25 to $500. The borrower will be required to pay back the loan with interest. The typical time frame for repayment is 14 to 30 days. The repayment time will depend on the company, and the borrowers paycheck schedule.
Benefits of A Payday Loan:
There are a number of benefits of a payday loan. No credit check is required, this allows anyone with a job and a bank account to obtain fast cash. The majority of payday loans are dispersed to the borrower within one hour of the initial application. A borrower who has a financial emergency will appreciate the speed of the loan process and fund dispersal.
Negatives Of A Payday Loan:
Potential payday cash loan borrowers need to be aware of the negatives surrounding this form of loan. The interest rate is astronomical. Each state sets how high of an interest rate is able to be charged on a loan. One of the main issues with these loans is the difficulty people have getting out of the loan cycle. A person who borrows $300 dollars will have to pay that amount back on their next payday. The repayment of the $300 puts the borrower short that amount of money again. The borrower will take out another $300 loan to cover their monetary needs. The act of borrowing and re-borrowing money becomes a cycle that is difficult to break.