Sometimes people get into unexpected circumstances such as a medical
emergency. These are times when people need more money than what we may
have at the moment. Though every worker receives wages or salary on his
or her payday, the amount of money earned may not be enough to meet
unexpected financial needs.
Payday advance
Is
there a way out in such circumstances? Yes, there is a way out,
provided by "payday advances." A payday advance is the timely assistance
rendered by financial institutions to people who need money between
their paydays.
A person in dire need of money in between paydays
can approach a financial organization that handles payday advances for
such a loan. When he or she applies for the advance to the financial
organization, the latter studies the application, decides whether to
approve it, and then communicates this to the applicant. Most payday
advance firms approve advances for a two to four week period. Most
payday advance firms require the applicant to be in employment for at
least 3 months, have a checking account with a bank for at least 3
months, and earn a monthly net income of $1000 after all deductions.
Though
payday advances are a boon in emergency situations, the interest rates
charged are usually very high. When a payday advance period is renewed,
the interest rates become even higher. Thus, payday advances are more
expensive than other forms of short-term credit such as a loan from a
bank or from a family member or friends, a credit card cash advance, an
account with overdraft protection, or a salary advance.
Because
of the prohibitive interest rates usually associated with payday
advances, it is best to consider such an advance as only a short-term
solution to an unexpected financial need. It is not intended for
repeated use in meeting usual expenses from one payday to another.
Because of the very high interest rates, repeated or frequent borrowing
of payday advances can cause serious financial hardship for the
borrower.
Processed online as well as offline, payday advances
are short-term (2 to 4 weeks) loans. Because they carry extremely high
interest rates, such advances should be used sparingly and with great
caution.
Payday advance
