Advance Payday Loans

| January 3, 2012

Advance payday loans are short-term unsecured loans granted to a borrower until the date of his or her next pay check. Although there are many well-known lending stores nationwide, there are some independently owned and operated. Companies that offer these services advertise quick applications, no credit checks, and instant approval, provided that the individual has met their requirements. To obtain an advance payday loan, a person would need to be at least 18 years of age, possess two forms of valid identification, proof of employment, and some may or may not require an active checking account with checks. Based on the borrower’s gross income and the particular lending store’s policy, he or she will be allowed to advance a certain amount of money with the additional fees. The maximum loan amount can be anywhere from $1,000 to $2,000. This may vary by location.

Generally, the loan process would begin with filling out an application to determine eligibility. The applicant would then need to present his or her identification and check stubs as proof of employment. In addition, the lending center will need a current bank statement and a blank check. After the application is approved, a store associate will then ask the borrower to fill out the blank check with the loan amount plus fees and postdate it for the next pay day. Afterwards, the borrowing party would sign a contract with the lender stating a promise to pay on the date agreed on, otherwise, the lender would be allowed to deposit said check. On the loan’s due date, the debtor should come into the store to pay off the account. After the account is paid in full, the store will return the postdated check so the individual can void it. He or she is, then, free to apply for another loan, if desired.

While advance payday loans may be good for temporary relief of unexpected expenses, they are not intended for long-term financial solutions. The interest rates on payday advances are exceptionally high as well as the fees associated with it. The fees can go as high as $18 for each $100 borrowed. This method of borrowing could cause a person to be in perpetual debt if not cautious. Advance payday loans have both benefits and disadvantages that could outweigh each another. Other options should always be considered before ultimately making the choice to take out a payday loan.

Category: Bad Credit Loan

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