How Borrowing Against Your Paycheck May Be Useful
Paycheck advances are short-term financial management tools that, when used correctly, can help consumers avoid bouncing checks, making late payments or hurting their credit rating. This service is always available in a crisis and the crisis isn’t even taking into consideration the way it is with traditional lending institutions.
This might seem like an easy solution but it is always best to explore all options when one needs money quickly. These services are also known as a payday loans, cash advances, instant cash loans, payroll advances or paycheck loans.
They are short-term loans taken against a future paycheck. Paycheck advances are available 24 hours a day if consumers apply online, or during regular business hours should the consumer choose to go to a store offering these services.
To receive an advance, one must meet the minimum requirements which include being at least 18 years old, having a checking account open and in use for at least 90 days, and earning a minimum of $1200 per month. Finally, to receive a paycheck advance, the applicant cannot have a bankruptcy in progress, nor have any other unpaid amounts with another service.
While these services do not conduct credit checks, they do employ risk assessments services to determine if the potential customer is current in other payments, or has outstanding paycheck advances with another service. The lender must do this to insure they can stay in business.
These loans have become even easier to obtain as many companies solicit business not just in storefronts, but also on the internet. While many companies will require that the applicant have access to a fax machine to submit required documentation, some companies may offer faxless options when they apply.
Borrowers can find out with an hour or less if they are approved for the loan and have money in less than 24 hours. The loan amount may vary depending on income and other factors as determined by the individual lenders.
However, most companies will be able to deposit the advance into the borrower’s checking account. A paycheck advance is meant to be a small, short-term loan, and will therefore never be greater than the next paycheck.
Advances come with high interest rates and fees attached. The terms should be clearly outlined in the contract.
Were the loan to extend for several months or even years, then these interest rates would be obscene. However, as these are short-term loans, the lender can make a profit and the borrower is willing to pay for the convenience.
Still, a borrower should always know what all the fees are, even the fees for extending the loan in the event they are unable to pay it back when agreed. Personal responsibility is needed.
Furthermore, consumers may want to look into other possible financial solutions to their immediate need that may offer lower rates. Sometimes even a credit card advance could offer lower rates than a paycheck advance.
Consumers should remember that even though others charge interest, it’s important not to charge such fees when they lend to others.
Jack R. Landry has a PHD in financial services and has written hundreds of articles relating to consumer services and payday loans. He has been a consumer advocate for nearly 25 years.
Contact Info:
Jack R. Landry
JackRLandry@gmail.com
http://www.CheckCity.com