Cash advance loan is one of the devices that fulfill the cash
demands, which occur between the paychecks. It is a type of short term,
unsecured loan, which matures, in next pay date. They act as an immediate
source of relief for people with insufficient cash or people who don't
possess any credit cards. In other words it is a great way to fund
emergency needs. One of the characteristics of this cash advance loan is
that they are renewable. This means if the applicant fails to pay the
finance charges and the principle, the applicant may go for payment of
finance charge only and the principle amount can be renewed for another
pay period.
A cash advance loan application must contain the applicant's name,
address, and information about payroll, bank and employment and last but
not the least the amount that one needs to borrow. After the submission of
the application the loan request goes through a process of scrutiny. After
the approval, the lender makes some last and final checks. For this reason
they may ask for some more legal documents like the current pay stub.
After every thing is approved the loan amount is paid either through funds
transfer, cash or paper check.
If any applicant renews cash advance loan the borrower is required
to pay back a part of the principle on the next pay date. But this kind of
situation occurs only when the borrower has renewed his loan four to five
times. According to the present market trends the cash advance loan
lenders expects between 25$ to 50$ of the principle amount as pay back.
Added to this the finance charges of the lender are kept as due. This
process keeps on going until the borrower has paid back the entire amount
of cash advance loan.
An applicant with bad credit score can also get
cash advance loan. A bad credit score usually takes place due to bounced
checks, payment penalties, etc.
Since this kind of loan is unsecured loan, hence it does not require
any kind of security. In order to qualify for cash advance loan especially
for those with bad credit score, the borrower requires meeting the terms,
which are quite easy. The requirements are a stable job; monthly earning
should be al least $800 to $1000 after all kinds of taxes and deduction
has been made. Lastly, the applicants must possess a proper identification
or social security number and a valid checking amount.
A word of caution though is that cash advance loans are expensive.
It is costly because the interest rates are higher compared to loans that
are traditionally offered by the bank. Though one may able to get best
rates just by shopping around with the various lenders. The interest rate
may vary or range from $30 to $100. But cash advance loan would not
cost much if the payments are made with in the schedule due date. But this
usually is common for each and every kind of loan in case the payments are
not made in time and hence can end up being costly.
