Payday Loans

Advantages And Disadvantages Of Quick Cash Advance Programs

Quick cash advance programs look like very attractive financing option, especially in times of emergency. But, there are some negative aspects also associated with these loans, which you must be well aware of. A planned approach towards these programs is very important. You must do a thorough review of both its pros and cons before you go ahead and sign up for it. Following is a brief overview on it.

Advantages

There are some obvious reasons why people often get tempted to use quick cash advance loans to borrow money so that they can meet their short-term yet urgent financial requirements. Some of the features that make these loans such an attractive option include easy qualifying criteria, simple application process, fast approval, no credit checking and not much paperwork. You can apply for these loans right from the comfort and convenience of your home, through the official website of a payday loan company. Almost anyone can qualify for it as long as they are over 18 years of age and have a decent employment record with an active checking bank account in their name. You can get the borrowed money credited to your bank account within 48 hours. What is more, even if you fail to make the repayment on the set due date, lenders often allow you another month to pay off the debt.

Disadvantages

The above mentioned features of quick cash advance loans are obviously quite attractive. In fact, they are so attractive that people often tend to ignore the negative aspects associated with the payday lending programs. But, ignoring the negative aspects will only make things very difficult for you at a later stage. To start with, the interest charged on these loans is usually in 3-digit APR. You can be charged interest at the rate of anywhere around 200% to 600% or sometimes even more. It means just a $300 of loan taken for a period of two weeks can cost you around $450 to $500. This is not all; since the repayment period is very short, borrowers often fail to make the repayment on the scheduled due date. Though lenders usually offer a one-month extension, but this is more a debt trap than a convenience because you are charged interest at the same high rate for this extra one month; hefty penalty charges are additional. If you are unlucky enough to be late by one month in repayment, you may have to pay back more than double of the actual principal amount. In fact, that is the reason why thousands of consumers in the United States of America are trapped into a vicious cycle of payday debt; many of them are on the verge of bankruptcy; many others are already bankrupt.

This is because of the predatory nature of quick cash advance loans why even the Federal Trade Commission warns consumers against it. No wonder why 16 states have already banned payday lending. Overall, despite so many attractive features, the risk factors involved with these short-term loans are very much likely to put you into serious debt problems. Therefore, it is better to avoid these loans and look out for better alternatives.


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Posted in Payday Loan Benefits, Risk Factors | 1 Comment »

One Response to “Advantages And Disadvantages Of Quick Cash Advance Programs”

  1. Robin says:

    Quick cash advance providing companies spend a big amount on advertising their programs. In emergency, we feel need of instant money that can be easily available in the form of quick cash advance. Before going for such loans, you must be well aware of all the pros and cons of these loans because it comes with a sky-high rate of interest. You may have to pay some where 200% to 600% rate of interest. Above all, the repayment period will also be very short and a person depending upon a fixed monthly income generally finds him self unable to repay the whole amount in the required time. Once you default a payment, the problem starts for you. Penalty charges will be added with hefty interest and the loan will be renewed for the coming month which means the basic amount will multiply two or three times. This becomes a vicious cycle of multiple debts and it becomes impossible to get rid of such debts. Many cases of Bankruptcy directly relate to pay day debts. The never ending cycle of such debts pushes a person towards bankruptcy that’s why it is always better to try some other alternatives rather than quick cash advance.

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