What is a Payday Cash Loan?

A payday cash loan provides short term financial help, which the borrower is required to repay within their next payday. This loan is also referred to as “Paycheck Advance “or “Payday Advance” depending on the demography. You can also call them as “Cash Advances” and can be obtained sometimes even through credit cards as a security document. Though many countries have announced a criminal action against people collecting more than 60% of annual interest, these loans are available in plenty.

There are many payday lending stores spread across the world, particularly the US and they offer instant payday loans to borrowers with the repayment due scheduled on the next payday of the borrower. To apply for a loan you may not need many documents, just a proof of income, your bank account details along with a personal phone number could suffice.

The Advantages of Payday Cash Loans

Payday Loans also have their own drawbacks and a lot of critics. They are also termed as “Money-Drainers” of the people. Some critics say that these loans take advantage of the monetary need of the people to make money. They are also criticized for posting very attractive advertisements over the internet as there is no limitation for any sort of advertising that is done online. These loans are marketed highly through the internet via emails or advertisements through online search engines.

The most dangerous part about payday loans is the trouble given by the loan companies if there is any default in the payback. Many loan companies receive a postdated check (PDC) from the borrower and threaten to take a criminal action against him/her by presenting and bouncing the check.

Normally a charge of about 15 to 30% of the entire loan amount is taken as interest which actually accounts to around 375 to 750 percent when calculated annually. For example a borrower will have to give a PDC of $ 575 to get a payday loan of $500 which normally has to be repaid within a period of 14 days. This amounts to about 390% interest if calculated annually.

To sum it all up, here are a few things you need to remember: