The current economic crisis has lead to a significant portion of the population needing small sums of cash in order to meet unexpected responsibilities. A pay-day loan (aka instant cash loan, cash advance loan, or no credit short-term loan) is a seemingly popular way to address these financial dilemmas. Applications can be processed online and restrictions are almost non-existent. Within hours a financially strapped individual can have cash in his or her hand.
These loans are all the rage because:-The application process is very swift.
-Very few fail to qualify.
-Cash can be had the same day the application was filed.
-Unexpected problems (such as a car breaking down or a sudden illness) can be dealt with within a matter of a couple weeks.
It is important to remember that not all payday advance brokers are created equal. 'Shopping around' is very much advised should you wish to take out such a loan. Consider all of your options and don't take the first loan that is dangled under your nose. Use the internet to comparative shop and you will be able to find the lender with the best deal in about 10 to 15 minutes. Just remember that some of these brokers offer loans that are interest-free to first time customers.
You should look for a loan that has the lowest rate, the lowest penalties, no processing fees, an easy repayment plan, and no hidden-charges. Interest rates should not approach 30% because these are almost impossible to repay. The comfort interest zone in the payday loan industry is 15%. Before taking a loan, you should also consider your income and expenses. You need to find a way to increase your income and or lower your expenses before your next paycheck so that you can repay the loan.
The most basic requirements that almost all payday lenders ask for is a $1,000 monthly income and a checking account. Lenders never run credit checks. Instead, qualification for a loan is based on:-age (must be 18 or older)-3 consecutive months of steady employment-employability (at least 1 year's experience in work field)-ownership of a checking account
But, you shouldn't look to these loans as the cover all solution to all of your problems. Many people end up trapped in a cycle of debt because they didn't take everything into consideration before taking a loan. Nor did they consider their financial abilities. For instance, a borrower should never borrow more than what is needed at the time. High loan balances have to be repaid very quickly with an even higher interest value.
You should know exactly how much of take-home pay you will receive in your next paycheck before taking out a payday loan. This is because the entirety of the loan must be paid with the next paycheck. If the loan amount exceeds your net pay or does not take into consideration your other financial responsibilities (such as rent, utilities, etc.), then you can find yourself having to take out yet another payday loan to cover the first loan. Same goes for failure to repay one of these loans. The balance, along with fees, penalties, and new interest, will be rolled over into a new loan that must be paid off with yet another paycheck. At this point, you are merely working for the cash advance broker. Always, use these loans as a last-resort.
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