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Payday Loans

Paycheck advances are short-term small amount loans (from 100$ to 1000$) that are borrowed to cover borrower’s expenditures until his or her next payday. Borrowers draw a personal check for the amount borrowed plus the finance fee and receive cash. The average payday loan term is about two-weeks.

Amounts of payday loans vary according to state legal maximums. Annual interest rate on paycheck advance varies from 350 up to 800Commonly, for 100$ payday loan borrowed for the period of two weeks, a person should pay 15-30$ of finance charge.

The main benefit of paycheck advance is relatively low requirements. A person only must have an account in a bank in relatively good standing, regular salary, and identification. Payday loan lenders do not conduct thorough audit of borrower’s credit situation. Many lenders don’t even ask to fax them copies of documents; they verify all the information by telephone.

Customary as a rule people apply for paycheck advance to pay for sudden expenses, such as urgent operation, medication expenses, car or home renewal that are undelayable.

Paycheck advances are usually made by payday loan stores, check cashers, and pawn shops, some rent-to-own companies. Customers can apply either by visiting the real store or via Internet by sending an online application to one of the paycheck advance lenders.

Online application is not only reliable, but also it is the fastest, paperless way to apply for a payday advance. Borrowers apply online through secured application forms. Online payday loans are direct deposited into the consumer’s bank account and electronically withdrawn on the next payday. Additional powerful advantage of online paycheck advance application is that you can apply 24 hours a day, 7 days a week all year long.

Payday loan works in the following way:

Payday loan lenders hold the checks during the loan period. When the next payday comes, consumers should pay the loan amount back plus the finance charge. Consumer can either redeem the check for cash, or allow the check to be deposited at the bank, or just pay the compensation fee and prolong their paycheck advance for following pay period.

The Center for Responsible Lending has made an investigation and has revealed, that the majority of the industry's income comes from constant customers. They always roll the payday loan over for next payday period. Better to say, they only pay finance fee at the due date, but their basic amount of a loan stays unpaid.

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