Many people who depend on their paycheck to pay the bills and for other shopping might face a dire situation if an unexpected emergency crops up in the middle of the month when payday a long way away. Such people can opt for cash advance on their pay from banks or private cash advance companies. Medical emergencies and higher than expected bills are a few reasons as to why a person might opt for a payday cash advance.
Cash advances are made to individuals based on a credit card or a payday check. A payday check advance can be obtained only if the individual is an adult and has a steady income of at least $1000. The employee will have to provide the lender with a post-dated check containing the amount covering both the interest and the principle.
Payday cash advances come with high interest rates. The individual must be ready to pay the required amount, the principle along with interest, by the next payday without fail. This will ensure that the advance will not be rolled over with a huge interest rate.
People prefer to take payday cash advances in small amounts because of the high interest rates and also because smaller amounts can be repaid without any problems from the next paycheck.
Lenders who provide payday cash advance do not usually do a credit check on the borrower. Also, a few details can be provided online and the amount will be transferred electronically after the details have been verified. This process will also work if the lender can directly get the amount from the borrowers savings account on the next payday. Another option is the post dated check to be deposited a day before the borrowers payday. The post dated check an also be faxed to the borrower at the time of applying for the loan.
It is not advised to take frequent cash advances as this might result in the individual finally ending up paying a lot to the lender in form of interest. There are a few alternatives to cash advances, such as loans from friends or relatives or an overdraft facility in a checking account and it is suggested to go through them before opting for this kind of loan.