Check Cash Advance: A Revolutionary Form of Borrowing


According to recent studies, American households generally stay on top of their finances but find themselves occasionally in a financial bind. Since the early 1990s, a short-term financing instrument known as the cash advance, has helped millions of cash-strapped consumers cover emergency bills and unforeseen expenses until their next payday. Also known as a paycheck cash advance, the cash advance loan, which is typically for an amount ranging from $100 and $500 and for a two-week period, serves numerous purposes. Borrowers may utilize the quick cash to 1) replace an aging home appliance, 2) purchase a new computer, 3) take a trip, 4) balance their budget, 5) consolidate their bills, 6) handle emergencies such as medical treatment or auto repair, 7) keep enough money in their wallets, or 8) pay their rent or credit card bills.

The customer's paycheck and job serve as collateral. The finance fee on a $100 cash advance for a two-week loan term is usually $15 to $20, which translates into an annual percentage rate (APR) of 390 to 520, respectively. The payday loan is a cost-effective solution enabling borrowers to pay their bills in a timely fashion and thus avoid high NSF or bounced check fees, late payment penalties and a tarnished credit score. The average NSF fee imposed by lending institutions is $24 per check, and the average late fee charged by credit card companies is $26. By contrast, the finance charge on a cash advance loan for $100 ranges from $15 to $23.

Qualifying for a check cash advance is easy, and the eligibility requirements are typically as follows:

  1. Must be 18 years of age or older
  2. Demonstrate a steady source of income
  3. Earn at minimum $1,000 per month
  4. Have an active checking account

Generally, borrowers must provide recent pay stubs and bank statements and furnish some form of identification, such as a driver's license. Some payday lenders will require applicants to have worked for the same employer in the last three months preceding submission of the loan forms. One of the breakthroughs in modern lending has been the opportunity of completing the entire application process over the internet. Consumers may choose to visit a retail paycheck cash advance store or fill out a simple online application in a matter of minutes and without having to stand in line. The online cash loan option allows borrowers to apply with the simple click of a mouse and from the comfort of their home or workplace. Service is even more expeditious than traditional lending since the online cash loan application is processed instantly upon submission. Furthermore, it provides privacy to individuals who might feel embarrassed to apply for funds in person. The vast majority of online cash advance providers do not require customers to fax any paperwork; rather, the entire transaction is completed online. There is no obligation to accept the online cash advance once it is approved. Online cash loan transactions are confidential and secure, and borrowers' personal data is treated with the utmost privacy. To ensure the safety of sensitive information, most online cash advance companies utilize a 128-bit secure socket layer (SSL) encryption technology. Consumers may apply 24/7 for an online cash loan and on their own schedule.

One of the chief advantages of a paycheck cash advance is that a bad credit rating or indebtedness on the part of a borrower does not pose an obstacle. Hence, this type of bad credit loan is referred to as a no credit check cash advance. While personal loans from banks may usually be obtained only if an applicant has a good credit score and/or credit history, a cash advance loan is approved without verification of a customer's credit report. Paycheck cash advance creditors offer the convenience of instant loan approval and direct deposit of the loan funds into the client's savings or checking accounts. Consumers can utilize the funds for any purpose, and on the loan's due date (next payday), the lender debits the former's savings or checking account. Most states allow borrowers who prefer not to pay the entire sum on the due date to renew or rollover the loan. Finally, cash advance lenders offer flexible repayment options. Borrowers may either 1) pay off the sum borrowed in full on the maturity date, 2) repay the finance charge and a percentage of the principal on or prior to the due date, or 3) pay only the finance charge on the maturity date.

 

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