Payday Advance Loans

Payday Advance Loans

It so happens sometimes that we run out of the month’s salary in the middle of the month itself and there is no way we can pull on till the month end.  Your employer does not want to give you your salary in advance and it seems like you will have to wait till payday.  You may feel that there is no way out but there is something that can be done- you can borrow payday adv loans.

What are Payday Advance Loans?

Payday adv loans are essentially payday loans, loans which you borrow from a payday lender promising to repay it on the next payday.  Since it is a loan granted against your pay, it is called a payday adv loan.  The salary which you will next receive is the security against which the loan is given.

Features of Payday Advance Loans:

  • The borrower of this loan should be above 18 years of age and should be a citizen of the country.
  • He should have a checking account and preferably a debit card.
  • He should have a regular salary income.
  • The lenders of payday adv loans generally do not conduct a credit check.
  • The lender does not ask for any documents.  You only have to fill in a form mentioning your salary, name of employer and date of joining.
  • Applying for payday adv loans is a very simple process and can be done within a minute.
  • The loan approval is also immediate.
  • Getting the loan money may take a couple of days but that could be expedited if you are willing to pay an additional fee to the lender.
  • If you find it difficult to repay the entire loan in a lump sum, you can opt for paying in installments on successive paydays.  The fees for such payday adv loans is however higher.
  • The interest and the processing charges together called the ‘fee’ are very high for payday adv loans compared to that charged by banks.

Many people have got habituated to borrowing payday adv loans because of the ease of getting the money sans any paperwork.  The borrowers, who are usually people from low income groups, do not realize that the loan is very expensive.  In fact, if one borrows $100, one may have to repay $130.  The annualized percentage rate of interest or the APR works out to be quite high.

People borrow payday adv loans even when the money is not really necessary and subsequently speed up find it difficult to repay on payday.  They borrow another loan from another lender to repay the earlier one and before they know it, they are neck deep in debt.  Instead of helping them out in times of need, payday adv loans may put the borrowers in even more difficulty.  This kind of loan therefore, should be borrowed only in an emergency and when you are unable to arrange for funds by any other means.

In fact, governments in the U.S. are not in favor of payday adv loans.  Some states have banned these loans and some others have framed very strict rules to regulate them.