Payday Cash Advance Loans: Questions and Answers

Many of life’s little emergencies require immediate attention. A leaking water heater, faulty furnace, or vehicle breakdown must be addressed right away in order to prevent additional costs or damage to valuable property. While many Americans are saving more money than ever before, these expenses can catch even the most careful consumers off guard and create a situation where cash is needed urgently. Many individuals borrow from their families or friends; others try to delay until their next paycheck or, worse yet, float a check without sufficient funds in their bank account to pay for these emergencies. Fortunately, there is an alternative that can allow most consumers to pay for unexpected expenses without the risk involved in delay or writing a check that may not be honored by the bank.

Payday cash advance loans are a feasible option for many consumers; many companies offer cash advances online for added convenience. These short-term loans put money into the hands of consumers immediately, without the delay and stress of traditional loans.

How do I apply?

Typically, the application process is streamlined and requires little paperwork. Most consumers must show proof of current employment, usually in the form of pay stubs; a current bank statement may also be required. Consumers can apply in person or online; the application is similar in either scenario, and requires that the applicant provide their current address, length of employment and time at current residence, income data, and some other miscellaneous information required by state and federal law.

Will I be approved?

Since each company uses its own criteria for determining creditworthiness for payday cash advance loans, there is no way to be certain. Most people are approved for cash advances, but in some cases the company declines the application. Some common reasons for declining a loan include:

• Current or repeated bankruptcy filings
• Insufficient income
• Inability to verify the information provided
• Multiple insufficient funds checks
• Other outstanding payday loans
• • Short duration of current employment
• • Short duration of current bank account

How long does approval take?

The time between application and approval varies depending on the company providing the cash advance loan. Local stores typically require about thirty minutes to an hour to verify information for first-time customers; returning customers can expect to wait about half an hour or less. Some online companies advertise a cash advance in one hour; typically, however, these companies deposit the money overnight so that consumers receive the cash by the next business day.

Will the cash advance company run a credit check?

Standard credit checks are usually not necessary, and bad credit is no barrier to approval in most cases.

How much will I be approved for?

Each company sets its own policies on loan amounts and income requirements. Typically your loan amount will be tied directly to your take-home pay or your gross monthly income. For repeat customers, some companies offer higher amounts with an established good payment record; however, this will not exceed the net monthly income of the borrower.

How much do payday cash advance loans cost?

Again, each company sets its own rates for cash advance loans. Since these loans are high-risk and short-term, generally they cost more than comparable bank loans for the same amount. However, they provide unequaled convenience and speed of processing, and are usually less expensive than the cost of two or three bounced checks or overdraft fees.

When will the loan be due?

Most payday cash advance loans are scheduled to come due on the applicant’s next pay date. If the borrower’s next pay date is within seven days or less, however, some online sites will extend the loan until the following pay date, usually at an increased fee. A few payday loan companies offer fixed-term loans, usually 14 days from the date the loan was issued.

For many consumers, payday cash advance loans can provide a quick source of money for life’s little emergencies. By using these services prudently, borrowers can ensure that they have access to the cash they need when they need it most.