Payday Loans Or Cash Advances

Payday loans go by several names including – cash advance, check loan, or post-dated loan. These are all the same type of short-term loan for amounts between $100 and $1000 depending on your financial situation.

Payday loans are for small financial emergencies. You can save money on late charges or bounced checks by securing a cash advance against your next payday. You usually have thirty days to pay back the loan, although with additional fees you can take longer to pay back the loan.

Easy Application Process

Applying for a cash advance can be completed anytime from your home. Through an online website, you enter your contact information and employment history. Most payday lenders require you to be at least 18 years old and employed for at least the past 90 days. Within five minutes, your application will be reviewed and you will receive notice if you are approved.

Quick Cash Advance

With an approved application, you will need to supply your lender with your checking account routing number so they can deposit your money. Through a wire transfer your money will typically be available by the next day.

No Fuss Payments

Payments for your loan are also handled online. Most payday companies offer at least three payment options you can choose from. On your due date, you can choose to pay only financing charges, the whole loan amount, or a portion of it. You can also change your payment plan, but you will pay more fees the longer you take to pay back your loan.

Convenient Help

Payday loan companies can be contacted through a variety of means. Typically lenders can be reached through phone or email. Increasingly, payday lenders are also using fax and instant messaging to answer questions. Payday websites will also post general information, including their rates, payment options, and answers to generally asked questions.

About the Author

About the author: Carrie Reeder is the owner of http://www.abcloanguide.com, an informational website about various types of loans. To view our list of recommended sources for payday or cash advance loans

In response there is a very simple reason that payday loan lenders can get away with the high APR’s. The fact that by law the rates must show APR (Annual Percentage Rate) for a loan that is designed to be repaid in two weeks in most cases is very misleading to the consumer. APR describes the rate of charge for a whole year and expresses interest and other fees as an annual rate.  If you annualize any product that you only use short term you will see where the discrepancies come into play.  For example a  simple movie rental  at a cost of $3.95 for 3 days  can be  annualized at an APR of 18250%!

This is where the misunderstanding about payday loan apr comes in to focus. If you annualize something that has a two week term, of course the APR is going to be high. In reality, a loan that has a two week payback and charges twenty-five dollars for a one hundred dollar loan (which is an average amount) your actual percentage is only twenty five percent! Sure, it is higher than some conventional alternatives but many people taking out a payday loan have issues with credit or other problems in their background that prevent them from using conventional channels of finance. This leaves the payday loan company assuming a much higher degree of risk than the more conventional  financing options and justifies the higher interest rate to match the risk taken by the lender.

I also hear a lot of people claiming that the payday loan industry takes advantage of the poor. This is an argument that makes no sense and those making the claim are ill informed or just repeating a mantra they have heard elsewhere. In fact, the average payday loan customer earns an average of thirty six thousand dollars per year or more  and is a white collar worker.  These people are far from being poor. At worst they are likely to have had money management issues in the past that cause them to avail the services of a payday loan company. It is not the loan company that has put them in their economic situation but the industry is often blamed when the customer decides not to re pay the loan.