How Does a Payday Advance Work?
Maybe you have heard of payday loans, and are wondering how does a payday advance work? The process is very easy, and quick. Whether you are borrowing at a neighborhood store front lender, or at an online website lender, payday advances work the same way.
First, you must fill out an application. When the application is approved, you will be advised as to how much you can borrow, based on your income. You must have income, and be of adult age to do these transactions. You also need to have a bank account. You will need direct deposit function, and checking account for the store lenders because they will ask you to fill out a check in the amount of your loan plus any fee. You must sign the check and leave it with the lender until repayment day. When you bring back cash, they give you your check back. If you do not show up, the check will be processed, and you may have a penalty next time of a reduced loan limit, or even banned from future loans.
The online payday advance repayments are done electronically. On your application, part of it is an ACH approval form. When your next payday rolls around, the online website lender will process your repayment electronically and the loan plus fee will be automatically withdrawn out of your bank account.
Lending limits vary by your income and the lender. Most only lend a small amount the first time, about $100 to maybe $300. Later, as you prove your borrowing ethic to be responsible, they can raise the amounts to as much as $1500. The time period is at least a week, to a month, depending on when your next payday after the initial week falls. Usually there is a two week period. People who are on retirement or disability, and who only get paid monthly, will have up to a month for repayment, or whenever that next payday falls.
With most lender, if you can repay the loan immediately, like the next day, the fee is eliminated from your debt. Obviously, this does not happen often or they would be out of business. Getting a payday advance is easy to do, and very convenient because online you do not have to go anywhere, or wait in lines. Storefront lenders are very friendly, and are willing to work with you on repayment delays if you contact them in advance.
Many states have limits to the number of payday advance loans a person can have at any one time, usually only two. This is for consumer protection against getting trapped into a loan cycle that they cannot get out of. Still, a payday advance can be advantageous over credit card loans because you must get out of them quickly.
Oz Hoopes is a freelance writer. Learn more information about payday advances at http://www.getecash.com/