A cash advance is a short-term loan for a small amount of money. It will usually have a $1,500 limit, and most companies won't check your credit. Cash advances are often taken out so that people can have money between paychecks. Most of the time, the loan will be given in cash and will be backed by a check with a future date. On the date that the payday loan is due, the lender will try to use the check to take money out of the borrower's account.
Most payday loan companies are small shops, but they often get their money from banks and other large financial institutions. A similar service offered by many banks is called a "direct deposit advance." Cash advance companies are good because they help people who can't get loans from banks because of bad credit or other problems. Some people can't get loans from banks because they have bad credit. This is because banks see bad credit as a risk. But this has opened up a big market that payday loan companies have taken advantage of. www.advanceloan.net is a good website with information about cash advances.
There are a number of places that offer cash advances, and pawn shops are one of them. Many businesses will keep the title to your car or another valuable item until the loan is paid off in full. As the number of people who use the internet keeps going up, more and more people are also getting payday loans online. Even though these loans are useful, there has been a lot of talk about them. They are known for their high interest rates, which can be as high as 240 percent APR. This may sound like a lot, but it is measured in two weeks, which is how long it takes to pay back the loan.
Because the interest rates are so high, the company that gives out cash advances is always sure to get back more money than it lends out. Even if the borrower decides not to pay, the company can still use the check to overdraw the borrower's bank account. The borrower will then owe money to both the bank and the cash advance company. Many people who take out these loans get into what is called a "vicious cycle," where they borrow money between paychecks and then have to pay it back when they get paid from their jobs. When they pay back the loan, they don't have any money left, so they have to get another payday loan.
Banks have also gotten a lot of flak for giving money to payday loan companies while turning down the same customers who come to them for loans. Many people think that the bank is trying to make money off of an industry that is growing while also protecting their own assets from losses. Even though there has been criticism of the cash advance business, it continues to do well. You should only take out one of these loans if you really need it. People who use payday loans often become dependent on them, so it's important to be in charge of your money.
