When to Use a Payday Advance Loan

Are you short in cash two or three weeks before your payday? Finding yourself in a financial bind, would you turn to a payday lender even if you know all the negative stories about payday loans? Let’s get this straight: coming up with quick ways of receiving money can be a costly venture. Having all the important information about your possibilities can help you with decision on your next move. Face it: the majority of people are living from paycheck to paycheck and probably all of them sometimes wish months would have less days so that they get their money sooner. Who wasn’t in a situation with no money on an account and only 2 or 3 days until the payday? Yes, people turn to payday loans then because it is convenient and yes, they carry high interest rates so many get stocked in the never-ending debt cycle. But realizing how and when to use a cash loan advance is almost as important as knowing exactly what they are or who to get them from.

Payday loan advance goes with a different name in nearly every state: cash advance, check advance loans or deferred deposit. It is described as a high-cost short-term loan, usually given to people with bad or nonexistent credit, and meant to be paid with the next paycheck. Basically they are a quick infusion of money to help you survive with the head above the water. The basic high risk loans involves a payday lender who checks borrower’s account information and income and then approves an unsecured loan that needs to be repaid by the next payday.

As they are unsecured you don’t need to provide any collateral or guarantee. Although some lenders verify incomes and run credit checks, majority of them just asks for some verification of an employment (via a bank statements).

  1. The amount you can borrow varies in different states. For example, in California the maximum loan amount is $300 with maximum loan term up to 31 days. In Indiana is no more than $550 and no less than 14 days and in Illinois is $1000 and does not exceed 120 days of maximum loan terms.
  2. Online payday lenders tend to charge higher rates and typically the cost of a loan is $15 for every borrowed $100 on average. This is the reason why such a negativity exists around them but knowing when to use them can actually benefit your financial situation.

Payday Loan – A Lifesaver or Debt Trap?

Since 2019 Consumer Financial Protection Bureau (CFPB) finalized a new regulations which wants to require the lenders to ensure the borrowers are enabled to repay the loans in the time frame they settled on the beginning. This regulation is designed to stop a debt traps many borrowers fall into because they cannot repay the loan in a timely manner so they end up repeatedly paying even more fees, rolling over or refinancing the debt. In the end they pay more in fees than the amount they borrowed.
Why is this so important? Because before if you didn’t repay it on time, you might got hit with the additional fees like non-sufficient funds charge, late fees or rollover fees. In the end they extend the amount of money you need to eventually pay. With the new legislation the payday lenders might pay more attention to your income and account information to assure none of that happens.

Benefits of a payday loan and how to avoid the drawbacks

Payday loans are designed for the people who are dealing with the temporary financial crises or distress. It can be an unexpected medical bills or huge car repairs or a need to buy a new washing machine. According to the latest research, more than 50% of US population don’t have savings so having an option of getting a quick financial stab can lower your stress before you receive your salary. After all, even with the unexpected situations, you and your family have to eat so this access to money really seems like a lifesaver.

Applying for a payday loan is easy; you can apply for it online and chance of being approved in the following hour is high.
Getting the payday money is fast; upon approval, money goes to your bank account and is usually ready for withdrawal the next business day.
Repayment is automatic; no need for calendars or reminders, you only need to have a sufficient amount on your account and the repayment will be made automatically.
No collateral or guarantee is needed; payday lenders don’t check the applicant's credit score so this is sometimes an only way for people with bad score to receive the financial help.
Having some basic financial education and self-control can benefit you in more ways than one. It can help you to avoid the danger of a ‘debt trap’ and rollovers and pay the loan in the time frame you accepted on the beginning of the process. Never take a payday loan if you already know you cannot cover it until the due date. Also never take a payday loan to cover the expenses of a bigger financial necessities like buying a house or a new car of university tuitions. There are other options made specifically for that cause that come with lower interest rates and longer payment due. Familiarize yourself with the payday lenders in your state and find some who doesn’t practice rollovers and offers an extended repayment options.
When getting a payday loan advance always have in mind to repay it quickly and on time. Although there is a lot of criticism of obtaining such kind of a financial options, people find them like a blessings during the harsh financial times. They don’t have to be a thorn in one's flesh. Think about your salary and other income and, if you are suitable for a payday loan advance, this type of a loan is a convenient way for you to make your life easier between two paychecks.

For more information about the payday loans contact our customer service.