Let’s be realistic, everyone runs into financial struggles every now and again. One of today’s rising solutions is a Cash Advance Loan, also known as a payday loan. This type of loan may be a quick fix for immediate cash needs. There are a few important things to know before you seek a loan of this type.
First, there is a fee. The fee or fees for such loans may range anywhere from $25 to $50 in some cases, and can also be based on a percentage of the loan. The fee is usually assessed on the date the loan matures, which is your next payday, unless you opt to renew the initial loan. If you renew your initial loan, you will be required to pay another finance fee, but may opt not to pay any of the principle. This can only continue for so long until the lender decides enough is enough and require you to pay back some principle in addition to the finance fee. This could be 4 or 5 renewals, depending on the initial loan terms.
Second, there is a process. You must first complete an application for the loan. The lender may require a number of things, usually a recent pay check stub, proof of identity, and proof of employment. Since there is no real collateral, the lender must do everything possible to ensure they can make their money back. Once the application goes through the underwriting process, your loan can be issued to you in either cash, paper check or money transfer form.
Lastly, there is a lot to consider. The risk should be weighed out in comparison to the need. It may be a good idea to only get a portion of what your next paycheck would be. This way you don’t have to relinquish your entire paycheck on arrival and still be left wondering how you’ll pay the bills due that pay period.