Payday Cash Loans

It sometimes happens that an emergency crops up at home-your car may break down or your roof may start leaking or there is something to be bought urgently. And you realize that you do not have the required cash. It is the middle of the month and your salary has run out. At such a time, payday cash loans come to one’s rescue.

What are payday cash loans?

A payday loan is a loan which is given like an advance against one’s salary. The lender issues the loan on the understanding that the borrower will repay it on the next payday along with the fee which includes interest and processing charges. These loans are also called payday cash loans. Generally, these loans are repaid in a lump sum. Sometimes however, the lender agrees to allow repayment in installments. The borrower will have to pay a higher fee for this facility. 

Procedure of obtaining payday cash loans:

Many years ago, people who wished to borrow payday cash loans had to go personally to the lender’s shop, submit the necessary documents such as salary statement and apply for the loan. Then came a time when the borrower could speak to the lender on the phone requesting him for a loan. He would then fax the necessary documents to the lender.

Then came the Internet and borrowing payday cash loans could now be done online. So now, a borrower has to just log on to the Internet, look for a site which is linked to payday lenders and apply for a loan on one such site. The application process is quick and so is the approval. The lender does not conduct any credit check nor does he ask for any documents. As a borrower, all you have to do is provide the name of your employer, date of joining the job and your monthly salary.

The money is deposited into the borrower’s account within 2 to 5 days.

Points to be kept in mind when borrowing payday cash loans:

  • Payday cash loans are very expensive. The interest amount may seem to be small but when you calculate the APR or the annualized percentage rate, you will find that it is very high.
  • Since these loans are very easy to obtain, there being no credit check nor any documentation, one may be tempted to borrow these loans even when there is no real need for money.
  • Borrowers of payday cash loans are usually from low income groups. Frequent borrowing from different payday lenders and the high fees paid on these loans may further worsen their already precarious financial condition.

These kinds of loans do not find much favor with governments and regulators. This is because, though payday lenders claim to come to the rescue of the needy when they need cash and when nobody else is ready to help them, in reality they exploit the poor and push them into a cycle of debt. Many of the US states have either introduced rules which bar payday lending or placed restrictions which will prevent exploitation of the borrowers.