There are times when one finds himself completely cash strapped and in immediate need of money. The need could be due to a medical emergency, car repairing bills, unforeseen household expenses or any other untoward incident. That is when one can avail a fast cash advance loan. These loans, also known as payday or paycheck loans ,address one’s immediate financial needs.
Reasons for Their Popularity
Fast cash advance loans have steadily risen in popularity. This is mostly due to the fact that they have a high approval rate. They also come with a short approval time and the money is usually deposited in the borrower’s account within an hour or two.
The best part about these loans is that they do not require a credit check. If someone is 18 years of age or above, all he needs is a steady source of income, a checking account and a personal phone number. If he can provide relevant documents stating the aforesaid, he is eligible for this loan.
Listing the Drawbacks
Even though these loans have many benefits, they have their share of shortcomings. These loans should be availed only when one is left with no other option. The following are some of the drawbacks of a fast cash advance loan:
- High Interest Rate- Fast cash advance loans have very high interest rates. The lenders also charge a certain processing fee which is to be paid along with the interest.
- Low Loan amount- Starting from a minimum of $100, these loans do not go beyond $1500. In case one needs more money than the above stated, he has to look for other options.
- Very Short Loan Period- These loans have a loan period which is usually till the next payday. In case one is unable to pay the requisite amount till then, he has to bear heavy fines and additional interest on the outstanding amount.
- Collection Agency Costs- If the borrowers fails to pay the outstanding amount within the agreed time, his case is then transferred to various operating collection agencies. These agencies charge their own fees which have to paid by the borrower himself.
Think Before Acting
Payday loans can become an unbearable burden very quickly. This will only deepen the current financial crisis of an individual. There are various other options one can consider before resorting to payday loans. One can borrow money from a relative or a friend or can get help the organization where he is presently working. These options come with either no or very less interest rates. All this will result in lesser financial worries and more peace of mind.