Whenever times are tough, whenever this paycheck cannot make us survive until the next paycheck, it is good to know we have payday loans or cash advances to look forward to. Payday cash loans are short term loans that employees take for a period usually of 14 days or until the next paycheck.
They are loans with an annual percentage rate or APR of 600% to even 1115%. It is like you pay an interest of $15 for every $100 borrowed for a span of 14 days. For example, you request a loan of $400, when you repay the principal plus the interest, the total that you will owe the payday cash loans company is $460.
Payday cash loans have their advantages and disadvantages. For some, especially activists and financial advisers, it is not a good idea to avail of such financing schemes but for people in dire need of money in a short amount of time, payday loans online are the only option.
Proponents against payday cash loans are basically against this practice due to the following reasons:
• Interest rates are akin to that of a “loan shark.” The interest rates are so high, especially if you look at it in an annual percentage rate point of view. It is so high that they are suggesting other means of financing like credit unions, employer payroll advance with no interest and other sources of financing.
• They tend to make a person slip into a slope of perpetual payday cash loans repayment. If you have to use $460 of your $1000 pay for this bi-week, chances are that remaining $540 will not get you through the day and you would have to request another payday loan. And so on, and so on, until you find yourself in a cycle you have no way of getting out of.
• Payday cash loans online are peppered with scammers that use your personal information in the online application form you fill out for their personal gains. In an era where identity theft is a growing profession, handing out your bank account number, ID copy and your Social Security number is not really a good idea.
There are always two sides of a story and for payday cash loans, that also exists.
• The processing speed is fantastic for legitimate payday loan sites. They can process your application in as little as half a day and your money is direct deposited.
• No credit check is usually done so people with bad credit ratings are not discriminated against when availing this type of loan.
• It is a convenient way of taking out a loan because the most that a payday cash loans agent will request of you is a copy of your ID, your bank statement and your pay stubs. And sometimes, some sites offer fax- free sites.
The bottom line is any type of loan is not really a good idea and in as much as there are bad outcomes that may come out of requesting payday cash loans, there are positive virtues too in requesting these so it really is up to the customer to decide if the risk is too much or too little to pass up the opportunity to take out a payday cash loan.