Cash Advance Payday Loans: A Quick Guide
Sadly, a lot of people today do not have enough money at their disposal to cover emergency situations. Most are simply getting by paycheck to paycheck. When the car breaks down or a family member gets rushed to the hospital, where will they get the money? When their cash suddenly runs out and their paycheck is still a week away, what will they do to survive? In these times of dire need, a cash advance payday loans can be a lifesaver.
The Process of taking out a Payday Loan
Payday loans: short-term unsecured loans designed to bridge the gap between paychecks when the need for instant cash arises. There are plenty of places where you can take out the loan, both online and offline. Whether it means going to a payday loan store or submitting online, the process follows virtually the same steps:
- You are required to give some personal and financial information relevant to the loan, like Identification 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. It is to be paid after a certain period of time, mostly on your next payday.
- Receive the money that you borrowed for personally or through electronic bank transfer.
Bear in mind that there are 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 payday loans are popular credit options among individuals who can’t avail for traditional financing. Whether it’s 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 £400 cash advance payday loans 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, 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 cash advance payday loans from any 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 the cash advance payday loans lender. 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 costumes 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.
What Are the Benefits?
In times of emergency situations, cash advance payday loans can be an option worth considering especially if you don’t have access to credit cards. You can easily turn on a payday 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.