Every day, more and more advertisements are being seen that show how quick and convenient it is to get a paycheck advance. Even if you have the worst credit, you can get a cash loan, just as long as you currently have a job. If that’s the only requirement, then a paycheck advance is a temptation that is almost impossible to resist. The loan can definitely come in handy if an emergency arises like automobile repairs or purchasing medicine for an ill family member.
If the need arises and you need money quickly, then a paycheck advance can meet that need, but if you are not financially responsible, then this cash loan could be a nightmare for you. Paycheck advances can be very costly for people who do not live within their means. Still, you can apply for them either over the Internet or at the offices of cash loan providers. No matter where you fill out your application, you will still find the application procedure to be quite easy.
Even though most, paycheck, advance lenders do not perform credit checks on their borrowers, borrowers still must meet certain conditions. Your monthly income be greater than or equal to a predetermined amount established by the lender, and as a borrower, you must also have a valid account at a bank at which the lender can directly deposit the funds.
This is how a paycheck advance typically works. Let us say that you need a $100 cash advance. After a two week grace period (14 days), you will be asked to give the lender $130.00. This is a great deal. You get the money you need and generally within two or three hours. If you only need to borrow the money once and you can repay the loan on time, then it is an acceptable transaction.
Unfortunately some people discover they are in trouble when they realize they can only make interest-only payments on their paycheck advances. Of course the loan specialists happy share this information because it is the aspect of their business that allows them to earn money. This interest only factor allows you to absorb $30 during the loan’s grace period. Rolling the payment over is what this practice is referred to by cash loan providers.
In another two weeks, you can repay the lender $130 to clear the loan off the books, but at this point, you have paid the cash advance company a $60 fee to obtain a $100 loan. If you continue rolling over the payment, the fee would be ridiculous. If you are not very good when it comes to managing money, you should seriously think about getting a paycheck advance before you sign on the dotted line.
A paycheck advance should be used as a only a last resort. If you computed the rate of interest on a cash advance of this nature, it would be approximately 500% a year. Knowing that, you should be running away from the idea of a paycheck advance unless you have no other alternative. Sure it’s easy to get a approved for a loan, but just be prepared to deal with the consequences of accepting one.