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Cash Loans
Payday cash advances are also known as cash loans. You have probably seen them advertised on television asking you to come to them if you are in dire need of cash quickly. Maybe you spent all your money for the month on spinning rims and the kids still need to eat. Perhaps, you took a bad fall and are not able to work and cannot get a line of credit. No matter what your reasoning is, seeking out a cash loan is pretty insane because of the way they work. You might as well begin selling pints of your blood to the local blood bank because you’re about to get drained.
Cash loans are scary, typically because of the incredible interest rate associated with them. On average, an applicant asks for and is loaned cash usually in the amount of $100 to $1,500 promising to pay back the cash loan in full at the time of the next paycheck, which is usually a two week period. The finance charges associated with the cash loan may vary, but is usually within $15 to $30 per $100 of the cash loan. That is translated into interest rates that are anywhere from 390 to 780 percent of the initial amount borrowed. If you were to look at this rate honestly, you’d be better off selling everything you do not need in a garage sale rather than pay a up to 800 percent interest for some cash.
Once the cash loan is established, the borrower writes out a check for the amount of the cash loan plus the interest and fees, as a promissory note. Commonly, the borrower is supposed to return the day the money is due and repay the cash loan in person. If they do not show up the lender may be forced to deposit the check to collect their money. In some cases they will do this electronically in order to insure that they immediately collect their fees. In order to make sure that there will be funds in the bank that they can collect the cash loan lenders will have the borrower supply them with recent bank statements upon the time of applying for the cash loan. In addition to this, they usually have the borrower show recent pay stubs to prove that they have a viable source of income and will be able to pay back the loan in the agreed timely manner.
In the case that there is an insufficient amount of funds in the borrowers account upon the time of collection, the borrower will be charged with a check bouncing fee from their bank as well as incurring additional fees and interest rates from the initial amount of the cash loan. Cash loans are not typically a solution to a financial problem and tend to be quick cash fixes for people that cannot obtain money needed immediately. The borrower usually needs the cash to cover expenses until their next payday because they have such terrible credit that they cannot get a bank loan. Cash loans are the prime example of the cycle of abuse currently established by creditors. It would be wise to avoid cash loans as a financial option.
Topics: Payday Loans |
