How Do Cash Advance Loans Work and How Much Will You Pay?

If you need money quickly, do you know where you would go to get that money? One type of loan that almost anyone can qualify for instantly is a cash advance loan. In some cases, they are also referred to as payday loans or unsecured personal loans. What is a cash advance, and what should you expect to pay back?

Cash Advance Loans Typically Require No Credit Check

Most types of online cash advance loans require no credit check or a cursory check to see how much a borrower is eligible for. To make the loan process easier, a borrower can go online to apply for a loan from dozens of potential lenders. All you need to do is submit your personal information, submit the loan application and receive your money. If you do decide to borrow money through an online lender, your information may be saved to make it easier to apply for another loan in the future.

When Does the Loan Need to Be Repaid?

There are a variety of repayment options that will be set by the lender. For payday loans, you should expect to repay the loan within 15-30 days. If you cannot repay the loan, you can take out another loan to pay off the first loan. This is known as flipping. Personal loans may be installment loans that are paid back in chunks each month until the loan is eventually repaid.

How Much Can You Expect to Pay Back?

Cash advance loans tend to have higher interest rates than other types of loans. This is because they are unsecured and are not based on your ability to repay. Payday lenders may charge as much as 100 percent interest or higher. Late fees equal to one percent of your balance or more may be charged if you are late repaying the loan.

Personal loans typically come with interest rates of 15 percent for unsecured loans. However, you may be able to secure a personal loan with collateral to lower the amount of interest that you will pay. Collateral could be anything such as the title to your house, car or anything else that could be quickly liquidated to repay the loan.

If you need money quick, a cash advance loan could be right for you. There are many local and online lenders that may be willing to give you a loan regardless of your credit history. Although the interest rates will be higher, repaying such a loan may be able to help you rebuild your credit and avoid having to take out a cash advance loan in the future.

Payday Loan Lenders – Who Are The Most Reputable

A payday loan can be of great assistance for those who find themselves short on cash at the very moment an unexpected expense requires the need for immediate payment. However, not all cash loan providers are legitimate, nor are all of these lenders properly licensed to conduct business. Reputable payday loan lenders do indeed exist, but for every honest loan operation there are dozens of scam outfits. Before taking out a cash advance loan, some careful investigation of the lender is warranted, especially if the loan process is completed online.

Better Business Bureau Accreditation
A company’s ethical practices and overall business reputation is important when it comes to making a decision about getting involved with them, especially where legally binding contracts are concerned. Reputable payday loan lenders will be listed as a trusted organization by the BBB. Information compiled and reviewed by the bureau include the company address and telephone number, where the company is licensed to operate, and whether major complaints have been filed by consumers. A grade given by the bureau reflects the positive and/or negative feedback provided by customers of the company in question.

Google Rankings
Although seemingly not important to some, a payday loan lender’s online website is given much attention by Google and other search engines. If the company is ranked on the first three or four pages on a Google search, chances are it has proven itself reputable in terms of valued consumer traffic. A reliable website address will also show the URL as virtually the same as the website name. It is wise to avoid those companies that shield their identity by using a URL address that is quite different from the name of the website.

Operating License
Checking with the Department of Financial Institutions in the state where the applicant lives is always a good idea. This can be done online and will immediately show whether the payday loan company can legally do business within the boundaries of the state in question. Many states not only display a list, they also show consumer feedback as well as red flags posted by the state government concerning the legality of a particular lender.

Reading The Fine Print
For the most part, a payday loan company offers short-term financing with a set fee included as part of the repayment option. Each state has laws regulating the amount of money that can be borrowed, the maximum loan term, and whether rollover loans are allowed. The amount of interest paid is disclosed up-front. If the lender insists on a recurring loan – with continued monthly deposits into the borrower’s checking account – the loan is probably illegal.

Many offshore companies advertise guaranteed payday loan approval for citizens of the United States and other countries. The fine print on the loan document will often include contractual obligations that cannot be severed unless the request is presented in writing. These illegitimate loan companies should be avoided at all cost. It is also important to remember that a reputable payday loan company will never obligate the borrower to accept an offer of credit until the application is signed, either in person or electronically.