Low Fee Payday
Loans, also known as paycheck advance loan
or cash advance loan, are a type of small
short-term low fee loan given with the
intention that the borrower will be able to
cover his or her expenses until the next
paycheck is received. It is, in other words,
a quick cash loan that is taken in an
emergency so that some immediate expenses
can be taken care of. Rules regarding such
loans can vary greatly from country to
country, and in the United States it can
vary from state to state. Some states have
strict limits limiting the annual percentage
rates (APR) that payday lenders can charge.
Some states have no such limits.
When a borrower needs money, they visit a
payday lending store and get a small cash
loan which will be taken with the
understanding that the borrower pays back
the full amount with interest when he or she
gets their next paycheck. This time frame is
usually 2 weeks. In the US, the interest
rate is usually between 15 and 30 percent of
the amount. Most payday loan stores will
require the borrower to write a postdated
check when the amount is borrowed. This way,
on the maturity date if the borrower does
not return the amount, then the loan company
will automatically take out the amount from
the borrower’s checking account. The
post-dated check is a type of collateral.
As safety measure most creditors will ask
for is the most recent bank statement, as
well as proof of steady income, such as a
pay stub. Nowadays, this type of borrowing
is happening more and more on the Internet.
This is because of the convenience and speed
which only the Internet can give. One
important thing to keep in mind is that as
far as the U.S is concerned, it is legal in
37 states. As far as the rest of the states
are concerned, it is either illegal or the
laws are such that it is not feasible to run
such a business.
A typical scenario where somebody needs to
use the services of a cash advance loan is,
when a person finds out that their car needs
some immediate and crucial maintenance. The
cost of the maintenance turns out to be
higher than expected. In this situation
getting a cash advance loan may be the only
option for the car owner.
There is another option for people who need
immediate cash and it is known as pawnshop
loans. Pawnshops give loans by taking
collateral, such as watches, jewelry or
various electronic items. It is usually done
with a 30-day limit, although some pawnshops
will extend the maturity date. For somebody who has run out of every possible option,
this may be a good way to get some emergency cash.
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