Cash Advances and Payday Loans Meant as Last Resort

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As Americans, we have all had to face financial hardships at one time or another. The best way to be prepared for these hard times is to set up an account that is only used for emergencies. These accounts should be added to every time payday rolls around just as if it were a bill that had to be paid. However, if an account of this nature has not been established before an emergency arises, cash advance payday loans are another option to consider.

In recent years, cash advance loans have exploded in popularity due to their convenience. Cash advance agencies require very little in the way of identification or collateral. A cash advance loan can be done in person or completely over the Internet. Repayment of the loan is simple; make out a check for the amount of the loan plus the interest, and the loan agency will process the check on the next payday. These loans do not require a credit check, so even those who have poor credit can obtain a cash advance loan.

For some people cash advance payday loans may be the only option when hard times arise. If bad credit were an issue, a loan from a local bank or other financial institution would be out of the question. Cash advance payday loans agencies specialize in providing funds quickly, usually within twenty-four to forty-eight hours. Also, the purpose of the loan is of no interest to the cash advance company as it would be for a local bank.

Even though there seem to be many benefits to these types of loans, there are also some downfalls to using cash advance loans. Cash advance payday loans often charge high fees and outrageous interest rates. In many instances, the loan must be paid in full within a couple of weeks or major penalties will ensue. Cash advance loans are a very high-risk for the lender due to the fact that no credit check is required and only very basic information about the borrower is obtained. This is the reason that the interest rates are set at rates starting at 400%. These high interest rates ensure that the lender will make a profit.

If a cash advance agency is the only option available, be sure to read their terms and fine print very carefully. Compare various companies in order to get the best rates. Being able to pay off the loan right when it is due is always the best approach in order to avoid getting further into debt. Furthermore, setting up an account for those “rainy days” that everyone will encounter is the best option.