By: Mevish Jaffer
For individuals who are looking for short-term loans in order to obtain urgent cash, payday cash advances may be an option worth considering. These types of loans can be availed through payday lenders, and require borrowers to repay the amount on their next pay day. Depending on what they are needed for, most cash advance payday loans are extended for amounts ranging from $100-$1000. Many people who are facing financial emergencies opt for payday loans because they are quick, convenient, and easy to acquire. Some of the basic requirements borrowers are expected to satisfy in order to get approved for these loans include the following:
- Be at least 18 years old
- Show proof of employment
- Meet minimum income requirements
- Have a valid checking or savings account
Payday loans can particularly come in handy when individuals need to get theirs hands on some quick cash for unexpected expenses. Cash advances also boast several advantages over traditional loans, including no credit check requirements and the ability to obtain online payday loans. However, payday loan trouble can just as easily arise when borrowers find themselves unable to repay the loan on time. This is precisely why it’s important for individuals to be aware of the potential dangers involved with cash advance payday loans. The following information should be considered by borrowers prior to applying for this type of financing:
1. Repayment
Although cash advances can be of great help during financial crisis situations, the default percentage regarding payday loans is very high. This is because individuals are not always prepared to make the repayment at the end of the loan term. The consequences involved with a default payday loan include penalty fees, which can add up to even more money for the borrower to pay back.
2. Bad credit borrowers
These types of loans are typically geared towards bad credit borrowers, or those with lower income. This particular situation can automatically lead to payday loan trouble, given the fact that these people are already facing financial problems. Therefore, they can often wind up experiencing further difficulty paying back the loan.
3. Financial emergencies
For many borrowers, payday loan trouble often arises when they begin to “use and abuse” them for the purpose of financing frivolous purchases that are completely unnecessary. While medical expenses and car repair bills qualify as financial emergencies, the urge to go on frequent shopping sprees is a completely different story.
4. Fraudulent Payday Lenders
When shopping around for the right payday loan company to secure funds from, it’s important for borrowers to be cautious. Unfortunately, there are a number of fraudulent payday loan operators out there who prey on innocent victims when they are financially vulnerable. Some of the big red flag signs to be on the look out for include: 1) payday lenders that offer extremely low interest rates, 2) payday loan lenders that do not provide any type of contact information, such as their address, phone number or company website, and 3) lenders that require borrowers to provide more than the basic information needed. Deceptive payday lenders are usually interested in a borrower’s personal information, commonly known as identity theft.
The information mentioned above does not necessarily mean that cash advance payday loans are all bad. Rather, the purpose is to make individuals understand some of the intricacies and consequences which are involved with these types of loans. However, being educated and well-informed about cash advance payday loans can help individuals make the right decision.
