A payday loan or cash advance is a temporary loan in which you receive money immediately and then pay it back at a later date. There are many different payday loan companies located within most larger towns or cities, offering a convenient and fast way to get cash. Another place to get the funds you need would be your local bank or financial institution. If you have less than perfect credit, this could be challenging. If you're considering a payday loan, but don't know if it will benefit you, here are some things to keep in mind.
No Credit Check
One benefit when applying for a payday cash advance is that the lending company generally does no credit check. This is a real advantage especially if your credit or FICO score is low. Keep in mind that you'll still have to meet some criteria. When you make an appointment to schedule a cash advance, the business will ask you to fill out an application with all of your personal information. You may also need:
- Personal references
- Employment information
- Utility bill confirmation
- Social security number
- Driver's license information and photo identification
In addition, you'll be asked to provide a bank routing number for your checking or savings account. This is because the money that they lend you will be automatically withdrawn from your bank account on a specific date. Make sure that your bank account does not currently have a negative balance and that you'll be able to deposit enough money—including fees and interest to satisfy the payday loan amount.
Short Term Financing
Another benefit to a cash advance loan is that it is short term. Typically two to four weeks, depending on your pay period. If you have a traditional bank or personal loan, your financing will be spread out for several months, costing you more interest over time. While there are fees involved with doing a payday loan, you can easily have them deducted from your checking account when the money is collected by the lender.
Fast Cash
A significant advantage of using payday loan services over your bank is that the funds are generally available within 24 hours. This means you have cash in your hand to take care of a utility bill shut off or pay for emergency medical care. If you have a traditional bank loan, you may not be able to access your funds for 30 days or more. This can cause you to fall further in debt or make it impossible to successfully handle an urgent situation in which you need cash fast.
No Collateral
Many traditional lenders such as your local bank or credit union often require some form of collateral if they are going to lend you money. This can be challenging if you don't own anything outright such as a home, boat or vehicle. This could lead to the bank loan not getting approved. With a payday loan, you secure the money you are borrowing with a blank personal check or automatic withdrawal slip from your bank account. On a specific date, typically the day you get paid, the amount you borrowed will be withdrawn from your bank and the loan will be paid off in full.
A payday loan, from a location like Money Place The, is a great choice if you have an emergency or urgent issue in which you need cash right away and can easily pay back at a later date. This is a great alternative to a bank loan if you have problem credit and lack collateral assets.
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