The Usefulness Of Payday Cash Advances
Sometimes all a person needs is a little cash
Sometimes all a person needs is a little cash. Perhaps something unforeseen, one of lives little challenges, wreaks havoc on a budget and brings about the need for a few extra dollars. Short of selling personal items at a pawn shop, many people turn to payday cash advances to help them make it through a crisis and on to the next paycheck.Known as cash advances and payday loans as well, these are generally smaller loans that are payed up in a matter of days of a few weeks. Sometimes the loans match the amount of the next paycheck or a portion of it, and other times they are loans against a line of credit. Either way, they can provide a bridge that can get you over a financial pitfall.
Brick and mortar or otherwise traditional businesses offer these loans as well as online businesses. Generally speaking, the borrower provides the required documentation, submits a loan application and writes a post dated check for the balance of the loan. The funds are paid back, typically in approximately two weeks, either in person or via an electronic transfer. The fee, depending on the state, can range between 15 and 30 percent of the loan value.
These types of loans are available all over the world, so many are surprised when they find out that they are not available in all 50 states. In fact, only 37 states allow this type of loan. These states generally regulate the practice themselves, however the federal government does provide some guide lines and some restrictions. There is a limit, for instance, on how much can be loaned to those in the military.
Many states have chosen to ban these types of loans citing their predatory nature, pointing to aggressive collection tactics and what amounts to a sky high interest rate. When calculated as an annual percentage rate, 15 to 30 percent of a payday loan can equate to up to 780 percent interest. Some believe this is exploitation of the impoverished and financial illiterate.
Those in favor have indicated these advances neither contribute to bankruptcies nor do they promote financial hardships. There is no conclusive evidence either way, and the proponents argue that many households simple could not survive at times without the availability of these loans.
So the battle between those that are for these types of loans and those that are dead set against them will continue. Certainly though there are many who will continue to leverage these advances until such time as they are made unavailable.
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