Payday. Everybody anticipates it for the reason that some Americans find themselves running short before next payday. Surprisingly, they already spent what they earned and are depending entirely on their next paycheck.
This is the very reason why television, radio, bulletin boards, newspapers and Internet have advertisements screaming that one need not wait for their next payday because they can get enough cash that will tide them over. These advertisements pertain to payday cash loans.
It may sound interesting but payday cash loans come with a price. Remember how your parents used to say that if it sounds so good to be true, it probably is. Payday cash loans are fine examples of this adage.
You must do background checks - especially if you are entering an agreement that involves money. Check the cashers, the finance companies and the other establishments that are involved in this short term yet high-rate loans. Do not be too overwhelmed by their various names. Be it check advance loans, cash advance loans, payday loans, deferred deposit check loans or post-dated check loans, they all mean the same thing.
Normally, a borrower prepares a check that is payable to the demands of the lender and indicates the amount he wishes to borrow. There is an additional fee. The company then gives the borrower his preferred amount after subtracting the additional fee.
Additional fees for payday loans are a particular percentage of the check at face value. It can also be a fee that is charged to the borrower depending on the amount of what the check states. Whatever condition is agreed on, the borrower pays additional fees for his payday cash loans.
The borrower has the right to receive any information. These may be in the form of writing or finance charge. The APR or the annual percentage rate of the transaction must also be stated.
Payday cash advance loans are secured by personal checks issued by the borrower. Consider this as an expensive kind of credit. Let's take this example. A borrower writes a check for $215 in order for him to borrow $200 for two weeks. The payday lender or check casher holds the check until the borrower's next payday.
Here is when the whole plan takes place. The lender is the one who deposits and redeems the check by giving the borrower $215 - the cash which is stated on the check. This rolls over by the borrower paying the fee the very minute he gets his paycheck. It may sound so convenient but because of the additional charges, in reality, the borrower is losing more than he thought he is gaining.
There are alternatives to payday cash loans. Various options are out there. You can consider the following possibilities before resorting to payday cash loans:
1. When you need some kind of credit, take the time to shop and look around. It is wise to compare the offers presented to you. Look for the offer that has a low APR. If possible, get one with the lowest. You should also take into account the small loans from smaller loan companies or credit unions.
2. Compare the finance charge and the APR, alongside the interest and the loan fees of the offers coming your way. You can ask the lenders to give you more time to pay what you owe. Find out whether they have additional charges for granting you this request. This is usually termed as 'late charge.'
Decide on the best payday cash loan available. But if you can budget your money to last you all throughout next payday, then do so in order for you to not encounter the problem of running short.