The sole purpose of this article is to provide you with comprehensive information about advance payday loans. This data will enable you to make an informed decision as to whether or not you should select this option in the event of a financial emergency.
What are advance payday loans?
Advance payday loans are short-term unsecured debt tools designed to cover your basic expenses if you have exhausted all available funds and your next paycheck has not arrived. Typically, the loan payment is not due in full until after 14 to 18 days have passed. However, the borrower is encouraged to remit payment as soon as funds become available to avoid additional fees. It is possible to defer repayment, but heavily discouraged as the fees multiply and have the potential to rapidly spiral out of control.
Where to Find Lenders
There are an extraordinary amount of advance payday lenders out there. Many can be found on the internet using search engines. However, it may be necessary to find a lender in close proximity to your residence or place of employment to expedite transaction processing. Some lenders are only able to disburse cash, so conducting business electronically is not possible.
How to Apply
Applying for an advance payday loan is fairly simple. Most companies have a straight-forward and brief questionnaire that must be completed to render a decision. If the lender advertises rapid approvals, they typically will not review your credit file and will issue a decision almost instantly. Online and in-person applications are very similar, but the decision windows vary be lender. If you apply online, it is important to verify that the lenderís site is secure to protect your information and avoid becoming a victim of identity theft.
How to Retrieve Funds
Once your payday advance loan application is approved, the amount the lender agrees to distribute will be made available to you for immediate use. Typically, on-site borrowers will be handed the cash at the counter. Those who borrow online will receive the funds through overnight electronic transfer or direct deposit.
Pros of Advance Payday Loans
Many are under the impression that all advance payday loans are detrimental. Furthermore, they feel that the lenders target those who are less fortunate and on the lower end of the financial spectrum. However, this is not always the case. It is actually more logical to obtain an advance payday loan than it is to incur bank overdraft fees. The loans come with fees, but they do not amount to the total expended to cover repeat overdraft fees that are incurred each time you make a purchase and sufficient funds are not available in your account to cover the transactions. To give you a basic idea, letís assume you make six purchases for a total of $200. If your account balance is not high enough to cover the charges and the overdraft fee is $35, you will rack up $210 in fees, and end up paying more for the bank penalties than you do for the initial purchase. With that being said, advance payday loan companies are on the same playing field as others who issue debt products.
Payday advance loans also offer the borrower a peace of mind since funds can be quickly and discretely retrieved (subject to approval) to hedge against fees associated with occurrences such as late payments and the disconnection of services.
Cons of Advance Payday Loans
Although their fees are the better alternative when compared to overdraft charges, advance payday loans can cause many problems for debtors. In the event that the loan cannot be repaid in a timely manner, the fees and penalties have the potential to quickly multiply and bury the borrower in a mountain of debt as time progresses.
Prior to applying for an advance payday loan, you should reach out to the lender who you owe and try to make payment arrangements. This will definitely be a better and more affordable option. For example, some electric companies will allow you to divide the payments throughout the course of the month to prevent the assessment of late payment fees in those weeks that money is tight. In addition, many mortgage lenders have an option where automatic withdrawals are made biweekly, making the payments easy to keep up with and also knocking time off of the term of your loan.
You should only seek advance payday loans to cover those expenses that are necessities and will have repercussions if payment is not remitted in a timely manner. Wants do not constitute financial emergencies.
Advance payday loans should only be used as a temporary source of relief. If you constantly find yourself borrowing funds, itís probably a good idea to reassess your financial situation and seek help if necessary.