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Before you
commit to a payday cash advance loan, you should know exactly
what they are, how they work and how borrowing money from one
of these lenders can affect you in the long run.
What is
a Cash Advance Loan?
An online
cash advance loan is quite simply a small loan made by a third
party company that uses your current wage earnings and checking
account as evidence that you will be able to repay the loan. Most
online cash advance companies will require recent check stubs
that prove you earn a certain pre-determined minimum amount each
month. They will also need evidence that your checking account
has been open and in good standing for at least a month. An online
cash advance can often be the quickest route to getting the cash
you need for an emergency.
Take a
look at this example:
Sam hasn't
had the best month. Two weeks ago she was surprised with a power
bill that made her wonder if she was supplying heat to the entire
neighborhood. As a single mom of two she is already overextended
as it is, and she's still trying to pay off what she spent at
Christmas. Before she could take a breath and ask "what's
next?", she took the car for an oil change only to find out
that she mad much bigger problems than dirty oil. When the estimate
comes back, she looks at the numbers with tears in her eyes wondering
how she can possibly afford to fix he car when she doesn't get
paid for another week and a half. She doesn't have any friends
or family to help her out and if she can't drive to work she's
going to lose her job.
Examples like
this happen every day to hundreds, possibly even thousands of
people all over the country. Hard working people are caught by
surprise by bills right when they least expect them. They don't
need a hand out, just a little boost to get them through a week
or two until their next payday. Thankfully with the online cash
advance, it can now be easier than ever to get over that little
hump. If you can meet the minimum requirements to apply, you can
often be approved for a cash advance loan in a matter of just
a few minutes and the proceeds from your loan will be available
to you within twenty four hours in most cases.
Most often
all that is required is that you be at least eighteen years of
age with a checking account and a stable verifiable monthly income.
There is usually no credit check required with cash advance companies
and you can get an advance loan of anywhere between $100 and $1,000,
sometimes even more. You should never borrow more money than you
really need to meet your obligations.
Advantages
of taking Cash Advance Loans.
Some of the
advantages of taking cash advance loans include:
- They are
hassle-free
- The process
typically takes less than half an hour
- It is available
in an emergency without having to put up any security
- The proceeds
of the loan are deposited automatically into your bank account
less than 24 hours after approval
- It is discreet;
nobody has to know that you went through a financial crisis
Cost of
taking Cash Advance Loans.
Let's face
the facts here - cash advance loans are not free. These companies
are in business to make money and make money they do, generally
charging a fee starting at about 25% on average. On first glance
that doesn't seem like much -- you pay twenty five bucks to borrow
a hundred.
They usually
come due in two weeks at which time you can either pay off the
loan or extend it for a longer period. Be mindful that extending
your loan will increase your fees, so you need to be careful that
you don't get caught in the trap of constantly renewing a payday
loan out of convenience. With most cash advance loans carrying
an annual percentage rate (APR) of 650% or more, when the fees
catch up to you it will be anything but convenient for your budget!
It is important to pay your cash advance loan off as soon as you
can.
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