A payday advance is another term of a payday loan. The short-term loan advance is available to all people in employment. The loan is secured by a personal check with a pre-arrangement on how it will be paid back. The interest on the advance is quite minimal depending on the amount advanced.
How Payday advance works
The borrower deposits a check with a face value he wishes to borrow. The lender will deposit the money into your account the following day. The lender retains your check until the next payday when he will deposit your personal check and redeem the cash. You can choose to pay out the cash other than an electronic transfer of the money.
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When you do not honor the advance, or you wish to roll it over for another period, you are charged more on the interest. The interest accumulates every time you extend your repayment period. Some short term loan interests are controlled to a certain level per annum, but one should be efficient in payment to avoid a higher percentage to repay very small loans.
Who qualifies for payday advance?
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(I) Age – Persons above eighteen years with a bank account and source of income do qualify for this service.
(II) Bankruptcy – You must not be declared bankrupt at any time or have a bad history of not honoring payments in good time.
(III) Bank Account – An old account has a better advantage over a new account. New bank account holders may not qualify for the advance.
(IV) Employment – New employees may not receive an advance. You will also need to meet the minimum level of monthly income the lender requires.
(V) Loan balance – An outstanding loan will limit your borrowing level.
How can default affect me?
We all understand that default is a serious crime in many countries or states. The lender will normally follow up for payment, but if it doesn’t come forth, he will involve a debt collector. Failing to pay can highly affect your borrowing credit power. The lender may not report you to the authority boards controlling loans, but a debt collector will report you. When the board receives the information, they may blacklist your name, and you cannot access loans soon.
The lender can try to solve the issue mutually by trying to call you to discuss the mode of payment. He can also choose to withdraw small amounts of money from your account until the loan is recovered. If there is a failed attempt to recover the money all bank charges are credited to you.
What to avoid
A payday advance can be very expensive in the long run. If you are required to pay a loan in instalments spread across some years, the amount you pay will be higher compared to a one-time repayment period.
Loans that state you give collateral for your debt are risky. Some lenders will require you deposit your cars logbook or a land title. Though the amount lent out may be equal to your property, the consequences may be dire. The lender will seize your property if you are not able to pay back the loan.
We all experience some cash difficulties at one time in life. However, getting a payday advance near me can be avoided by simply building fast cash account. You can sell some of your property that you do not need and deposit in the emergency account you have opened. An income generating hobby or interest will give you cash to help you out in such a moment. When you receive your end month check, you can decide to set aside some little amount of money towards your emergency kit. Lastly, you can choose to borrow from a relative or friend to avoid the interest that comes with these advances.