Pros And Cons Of A Payday Cash Advance

Many of us have experienced the gut-wrenching sensation of coming up short at the end of the month. What can a person do if an unexpected accident or other life event is going to cost more then they have at hand? One solution in a pinch is a payday cash advance. These are short-term loans that are designed for speed. You quickly get the cash and you are expected to repay it in full immediately upon receiving your next paycheck.

Obviously the privilege of borrowing money has a price. The fee will depend on where you go for a loan. In some cases, the fee is worth paying because it prevents bigger problems like eviction, car repossession, or it provides disaster relief. However, it is very important for a person to avoid these loans if it is likely that they will not quickly have the means to repay the lender. Unpaid loans will most likely result in heavy fines. It is also likely to complicate a person's financial identity and relationship to their bank.

Traditionally, a payday cash advance works like this: the lender is asked to provide pay stubs or bank statements proving the likely ability to repay. They are also asked to provide a post-dated bank check for the borrow amount plus fee. They are expected to appear in person to repay the loan; the lender will attempt to cash the check if they fail to appear. Should bank funds be insufficient, the borrower will face stiff fines from the lender as well a bounced check fee from the bank.

Because these loans are very short term, it is usually best to think about the borrowing fee rather that attempting to calculate APR. It is advisable that a person judge whether this fee is worth paying against the benefit of borrowing the money. Under no circumstances should a person consider this kind of loan unless the ability to repay within the set time frame is reasonably certain.

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