Cash advance loans are available
for people who need to borrow money fast. These types of loans are easy to
acquire, but their interest rates are very high. When availing of cash advance
loans, the borrower writes a personal check that is payable to the lender. The
check will contain the amount borrowed plus the interest. The company, or the
lender, releases the amount that the borrower is availing, minus the fee. The
company engaged in cash advance loans holds the borrower’s check until the
payment is due, which is usually the next payday. The lender that conducts the
cash advance loans may also deposit the check with the borrower’s permission.
The loan amount for cash advance loans may be debited the next payday. In cash
advance loans, the borrower is also subjected to new fees each time that the
loan is rolled over or extended so far.
Truth in Lending Act stipulates that the borrower must know the cost of the
loan when availing of cash advance loans. Before signing for cash advance
loans, the lender must show the borrower the finance charge plus the annual
percentage rate. The borrower must then sign for the cash advance loans. Also
known as payday loan, cash advance loans are very expensive credit. For
instance, the borrower needs $100 for two weeks. The borrower then writes a
check for $115. The $15 is the borrowing fee that comes with cash advance of
loans. The lender then agrees to hold the check until the next payday comes
around. When payday comes around, the lender then deposits the check, in which
case the loan is paid, or the borrower for the cash advance loans would pay
another $15 to extend the loan for another 14 days.
advance loans are not ideal for people who are looking to loan for the
long-term. These loans are very expensive and the interest rates are very high.
The interest on cash advance loans can easily climb to the amount that was
loaned in the first place. Cash advance loans are not ideal, but they are quick
sources of money in times of emergencies. Moreover, they can provide a quick
funding when needed. There are several alternatives to cash advance loans. For
instance, a small loan may be acquired from the local credit union or a small
loan company. Some banks may even offer small, short-term loans. Another
alternative is to shop for a lender that has the lowest cost. In this case, the
finance charges must be lower than that of cash advance loans. Lenders must be
contacted as quickly as possible if more time is needed to pay the cash advance
loans. Lastly, it may be a prudent to contact the local consumer credit
counseling service if the person is having a hard time paying back the money on
cash advance loans. These loans are proper only in cases where there is dire
need. Cash advance loans are considered to be favorable in emergencies and
other such circumstances.