Consumers have a lot of questions concerning payday loans. A few of the most commonly asked questions include:
What is a cash advance?
How do these loans work?
Can I qualify for an advance?
Before deciding whether a payday loan is right for you, it’s important to know the answer to each of these three questions.
What Is Cash Advance?
If you are wondering what is a payday loan, you should know that the payday loan and cash advance definition is exactly the same. Both of these loans are short term loans usually given until a borrower’s next payday. If something comes up and you need extra money between pay checks, you can apply for a cash advance to hold you over. Once you receive your next pay check, you will repay your loan plus interest.
Payday loans are small loans, usually around $1,500 or less. You will never be asked to provide collateral or even submit to a credit check. The lenient requirements are a major reason why payday loans so popular among consumers. As long as you make enough money to repay the loan, lenders will be willing to give you an advance.
Another reason why consumers turn to payday loans is because they are fast and easy. Instead of waiting weeks to receive a loan, you can apply online and be approved within minutes. Depending on your lender, you may even receive your loan the very next business day. You will not be asked to fax various documents or spend hours filling out an application. You can complete an application online within a matter of minutes.
How Do Payday Loans Work?
Once you know what a cash advance is, you may be wondering how does cash advance work? Fortunately, the entire loan process is very simple. You just apply for an advance, receive an approval instantly, and have the money in your bank account the next day.
To qualify for a cash advance, you must be at least 18 years old, employed and make a reliable income of $800 to $1,000 a month. You should also be a United States citizen or legal resident and receive your income by direct deposit. According to cash advance Wikipedia, these are the basic qualifications required by most lenders. Payday lenders make it easy to get the money you need between paychecks.
Once your application is approved, you will receive your money via direct deposit. You may use the money to begin paying overdue bills or cover daily living expenses. On your next payday, a portion of your paycheck will be used to repay your advance. If you are unable to pay, you can contact your lender to make alternate payment arrangements.
While cash advances are meant to be short term loans, most lenders will extend the term of the loan if necessary.
If you need money to pay an overdue bill or cover an unexpected expense, a cash advance can help keep you on track. Instead of waiting for your next paycheck, these loans make it possible to take care of your bills immediately. While you will be asked to pay interest on the loan, this expense is usually worth it when considering the late fees and other expensive penalties you will be avoiding.