How Cash Advances And Payday Advances Work
Payday Loans are for Borrowers with Bad Credit
Payday loans are designed to provide funds to borrowers with bad credit scores or no credit history. Payday loans are unsecured, which means that they are not backed by any collateral. (An auto loan is an example of a secured car loan. If you default on your payments, the lender can take the collateral - in this case, your car).
Since lenders are providing unsecured loans to people with bad credit, there is a higher risk that the loan may not be repaid. To make up for this risk, payday loan lenders charge extremely high interest rates.
The average annual interest rate for a credit card is 13%. The average annual interest rate for a payday loan is 365%. This huge difference is why payday loans are so expensive.
In addition to higher interest rates, payday loan fees can snowball quickly if you do not repay the loan when it is due.
The Center for Responsible Lending explains how a 69-year old man paid out over $5,000 in interest for a $300 loan. This is because the loan was rolled over more than 100 times. It is extremely important to repay the payday loan on time.
Decide if a payday loan is right for you. If you don’t need a cash advance right now, improve your credit so that you are more likely to qualify for a less expensive loan in the future.
Online Payday Loans are Quick and Easy
Getting a payday loan online is very easy, so make sure that you know what a payday loan is before you apply.
Lenders may ask you to provide proof of employment. Our payday loan online application is secure and protects your information.
Wait for the payday loan lender to approve or deny your loan
You may get denied your payday loan, but since there are more lenders online, you have a better chance of being approved for a payday loan by applying online.
Choose your method of repayment
Make sure to carefully read all the terms and conditions. If you agree to the terms, the lender will electronically deposit funds into your account.
Repay your loan
Though interest rates are high, late fees and rollover fees only add to the costs of a payday loan. You will save money and avoid unmanageable debt if you repay the payday loan on time.
There are Several Repayment Options Available for a Payday Loan
Give the lender a post-dated check which is cashed when the loan becomes due. This option is for payday loan stores. Make sure funds are available when the payday loan is due.
Authorize an automatic withdrawal or electronic debit from your bank account. This option is more common for online payday loans. Make sure funds are available when the payday loan is due.
Renew or roll over the payday loan if you are unable to repay on the due date. Remember that this option is very expensive. Lenders may have additional fees in these cases.
Online Payday Loans are Secure
Online payday loan lenders are strictly regulated and adhere to these regulations so they can stay in business. They must have a secure, encrypted website to ensure your information is protected.
Make sure that you are applying with a real, trusted payday loan lender - like the ones we can help you find.