Online Cash Advance Loan – An Easy Way To Borrow Instant Money?
Salaried individuals usually have to live with a limited monthly income. They have a set budget for every month. They often find themselves into a difficult problem when they are hit with an unexpected yet urgent expense. Those who order generic cialis always maintain a decent saving fund deal with such problems easily, but those who do not look out for other financing solutions, such as online cash advance loan, which is just another name for Internet payday loan. Try searching for information about these loans in search engines and you will be bombarded with thousands of search results; the majority of the websites full of praise for these loans that how beneficial they can be for you. Some of the features that are often advertised about these lending programs include easy application process, no faxing, no credit checking, no paperwork, no verification, very easy qualifying criteria, and fast approval. It is true – all these features are there. But, you will be surprised to know that despite all these features that payday loans offer, the Federal Trade Commission warns consumers against these loans. As per the FTC, they are predatory lending programs, designed in a way to trap consumers into a vicious cycle of debt. This warning or analysis is not based on thin air. Following is a brief rundown on the other side of the story, which payday loan companies never tell you.
How Do Cash Advances Turn Into A Debt Trap?
The repayment terms for an online cash advance loan are usually quite difficult, but people often fail to realize it when they borrow these loans. To start with, a $100 of loan borrowed for as small as a 14-day period can cost you anywhere around $30 to $70 just in the form of interest and finance charges. It means if you are borrowing $600 for two weeks, you must be ready to pay back anywhere between $780 and $1020. Even if you think you can afford it, you must also know what happens when you fail to make the repayment on the set due date.
When you miss the due date on an online cash advance loan, you are charged hefty penalty charges. It all starts with NSF fee, which is charged multiple times, as most lenders keep on sending the same check again and again for collection even if it keeps on bouncing every time. Besides that, your debt account is also charged with additional interest at the same high rate (3-digit APR) for every single day of delay. Some people borrow another cash advance to pay off an existing account, which is one of the worst financial decisions a person can ever make. Rollovers work in a similar way. All these solutions bring temporary relief to you, but the next month, you will find yourself in a much deeper debt trouble. In short, if you are late in repayment for one or two months, the overall outstanding debt balance on your cash advance account is very much likely to grow just double or triple (or even more) of the actual principal amount that you initially borrow.
It is not without any reason why sixteen states in the US have strictly banned online cash advance loan programs. Therefore, you are advised to avoid these loans as much as possible. There are several better alternatives available out there in the market; you just have to look into the right direction with the right approach.