An Introduction to Payday Loans and Cash Advances
Payday loans are also called cash advances, and these are short term loans that you would have to repay from your next pay check. To abide by the loan's terms and conditions, you would give the payday lender a postdated check that they deposit at an agreed-upon time. Along with this method, you could give the lender your banking information so they can deduct the amount from your checking account on payday. Payday loans and cash advances are intended to be a way to get money quickly, for emergency purposes, not as a long-term financial solution.
Cash advances and payroll loans have their advantages. Getting this type of loan is usually much faster than getting a loan through conventional channels, and there's no need for collateral. In most cases, there's no need for a credit check; you offer your most recent check stub as proof of income, along with current utility bills as proof of residence. The entire loan process can be finalized in less than an hour, and most times, you can walk out immediately with cash in your hand.
This type of loan also has its disadvantages. They normally come with a much higher interest rate than a traditional loan, and there are usually transactional and other fees that add to the loan total. Loan terms and conditions typically allow lenders to take legal action if your bank does not honor your check or refuses to process their automatic withdrawal.
Before you decide to seek a payday loan or cash advance, you should ensure that your chosen lender is operating within the laws set forth by your local jurisdiction. You should also carefully read the terms and conditions before signing, and know how much you'll need in order to repay the loan and all its fees.