Payday loans and some common questions

Quick cash loans or cash advance loans are often derided as high-interest lending that preys upon people who are barely able to take care of themselves but lauded as a lending choice for people who have no other option. . Quick cash loans or cash advance loans have their pluses and minuses, but a lot of debtors use them when they find themselves in an occasional short-term shortage of money.
 

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Here are the answers to some frequently asked questions about cash advance loans:

What is a payday loan?

A payday loan, also known as a quick cash loan or cash advance loan, is a lending product created to offer two-week cash to those in need. Payday loans, which are typically two weeks in length, are obtainable at stores that specialize in them and aren't available at banks.

How might I get the best bargain?

Many, if not most towns have many stores that cater to temporary lending needs; you might find a little bit of competition if you compare one lender to another. The best way to lower your costs is to ensure that you don't renew the cash advance beyond the two-week period. You can obtain a good deal on these cash advances the same way that you get a good deal on anything - you shop around. Some credit unions are advertising alternative lending options, you ought to consult with one of them first.
 

How much do cash advance loans cost? How do the fees work?

Should you want to borrow cash, you would write the personal check for the sum of the borrowed amount plus the fees, which is the amount you would need to pay back 14 days later. Lenders are required in many, if not most states to post a sign notifying individuals of the annual interest rate paid on the amount borrowed. Short-term lending fees, when considered on a twelve month basis, can amount to an interest rate of anywhere from 250%-1000% a year, although, as the businesses point out, the products are intended for 14 days only. Payday loan prices vary widely, but typically cost about $10-$30 per $100 worth of loan, with $15 the most common fee.

What happens if I cannot pay?

In some cases, payday loan stores will sue borrowers who don't pay. If you do not pay and your check bounces, you will have to pay bank fees for the bounced check as well as additional fees to the lender. If you fail to show up to pay on the due date, the store will more than likely deposit your check, which will likely bounce.

What if I cannot repay in 14 days? What is a "rollover"?

Most states have laws in regards to how many times a loan may be rolled over. A person who renews a loan would pay the fee again today and repay the principal in another two weeks. If you cannot pay back the cash advance loan when they are due, you must "roll over" the loan, which means that you must pay the fee a second time.

How do these cash advances vary from bank or credit union loans?

When a payday loan is approved, the borrower writes a bank check for the amount, plus the fees and postdates it for the date that the cash advance loan is due. When repaying a cash advance loan, the borrower can either pay off the cash advance amount plus the fee or the lender can cash the check.