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Cash Advance Payday Loan: A Quick Guide
Sadly, a lot of people today do not have enough money at their disposal to cover emergency situations. Therefore most are simply getting by paycheck to paycheck. Now, when the car suddenly breaks down how will you pay. What if a family member gets rushed to the hospital, where will they get the money? Also if cash runs out and the next paycheck over a week away, what will they do to survive? In these times of dire need, seems like a cash advance payday loan can be a lifesaver.
The Process of taking out a Cash Advance Loan
Cash Advance loans are short-term, unsecured and designed to bridge the gap between paychecks when the need for cash arises. There are plenty of places where you can take out the loan, both online and offline. Whether it means driving to the nearest cash advance loan bank where you will have your credit meticulously looked over. Consequently submitting an online application, the process follows virtually the same steps:
- You are required to fill in some personal and financial information relevant to the loan, like Identification Card, paycheck stubs, and bank account details
- Make a loan request for a certain amount of money. The money can be secured by a check or via bank account debit authorization.
- Agree on a certain payment term. The term will include the full amount plus interest rate to be paid for a certain period of time, mostly in your next payday.
Receive the money through electronic bank transfer
Bear in mind that there are a few factors that will decide on the amount of money that you can borrow such as your monthly income. Credit history is not a deciding factor, though, which is why cash advance loans are popular credit options among individuals who can’t avail for traditional financing due to bad credit ratings or those who don’t have an existing credit history at all.
How Does it Work?
For instance, you have a medical bill that you need to cover and decide to take out a £400 cash advance loan to cover the expense. You will issue a post-dated personal check of £440 (the £40 being the loan’s interest rate) addressed to the lender. You show this information in your online application and the lender approves your request and transfers £400 to your bank account with the agreement that you will pay £440 in a certain period of time, usually 14 days or in your payday. When the time is up, you pay the lender £440 in cash, allow them to deposit the post-dated check, or make another post-dated check for the said amount including the interest rate charges.
However, if you fail to pay off the full amount plus interest rate, the lender has the power to charge you even further making the loan very costly. This is why it is very important that you make the proper repayments when taking out a cash advance from a payday lender because you will never know such a small, short-term loan can become a real thorn in your financial health when the extra charges come crashing in.
Who are the Borrowers?
Every year, millions of people avail for cash advances from payday lenders. The loan is designed for speed and accessibility which makes anyone with a checking account and a reliable income a potential borrower. Mostly, borrowers who do not have access to credit cards or savings accounts are the primary customers of this type of credit. Also, people who have bad credit history or do not have an existing credit history (this can be true to most fresh graduates and young adults still in the early stages of their career) are regular costumers since lenders normally do not require credit checks when evaluating loan applications. It is a great option for those that are desperate for a loan.
What Are the Benefits?
In times of emergency situations, cash advance loans can be an option worth considering especially if you don’t have access to credit cards. You can easily turn on a cash advance loan lender and get the money that you need to cover up medical bills, car repairs, and anything that requires urgent financing, without much delay. Most importantly, if it is too difficult to apply for traditional financing because of your credit history, then having this loan would prove useful. And if you suddenly run out of cash and it is still a long way before you get your next paycheck, you might just be glad that there is a payday lender just around the corner.