Payday Loans

How Do Fast Cash Advance Programs Work?

Considering the rapidly growing popularity of fast cash advance programs, you must have a lot about it that how it can help people get instant money when they need it on an urgent basis. These programs claim to approve small amount of short-term loans within a matter of just a few hours, which is true also. Even the qualifying criteria are very simple. All these lenders require you to have is a decent employment record with a checking bank account in your name. They do not check your credit score. It means even if you have poor or bad credit, that’s not a problem. You can still qualify for these fast loans. But, there are several serious negative aspects also associated with these otherwise attractive financing options which you must be well aware of. The following information will help you decide whether these loans make the right choice for you.

They Require You To Pay Back Within A Very Short Period Of Time

If you are considering signing up for a fast cash advance program, the first thing that is very important for you to keep in mind is that the repayment period on these loans is usually very short, just a couple of weeks. In most cases, you are required to pay back the borrowed money along with interest and other finance charges on the next payday. For example, if you are borrowing money on March 20 and you get your monthly salary credited into your checking bank account on 3rd of every month, April 3 will be the due date for you. Before you sign up, you must first do your calculations whether you can practically afford to make the repayment within just 14 days.

They Require You To Repay A Much Larger Sum Than The Amount You Actually Borrow

The worst thing about fast cash advance programs is that they charge extremely high rate of interest. Besides that, several additional finance charges are also applicable. In general, if you do the calculation thoroughly, you will be socked to find out that a $500 of loan can cost you over $300 just in the form of interest and other charges. So, the next thing you have to work out on is whether you can practically afford to repay $800 for a $500 of loan within such a small repayment period.

Extending Due Date

Most lenders will allow you to extend the due date for another month, but this is not something you should feel happy about. This is a trap. If you go for it, you are very much likely to be pushed deeper into a vicious cycle of payday loan debt, coming out of which will not be easy. In fact, many borrowers end up getting bankrupt because of this. When the due date for a fast cash advance program is extended for another month, you are charged interest and other charges at extremely high rate. You can realize the horror of the situation with the very fact that just one month of extension can result in your overall outstanding debt balance towering to just double or triple of the actual principal amount that you initially borrow. Therefore, if you cannot afford to repay these loans in a timely manner on its set due date, you will be in a very serious trouble.

These days, many conventional banks and credit unions have also started offering short-term cash advances on comparatively much lower rates and on more affordable terms. They can make better alternatives to fast cash advance programs. You are advised to avoid these predatory lending programs as much as possible. Go for it only if you are left with no better options and only if you can afford to repay it in a timely manner.

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