Posts Tagged ‘pros and cons of faxless cash advance’

Everything You Want To Know About A Faxless Cash Advance

A faxless cash advance is a type of payday loan that allows you to borrow a small amount of money for a very short period of time without requiring you to go through any complex paperwork. Unlike conventional loans, where you have to submit an array of documents, these loans do not require you to fax or submit any documents. There are several other attractive features also, such as no credit checking and quick approval. But, despite all these facts, it cannot be said that these faxless loan programs make the best financing option for you when you need extra cash urgently. Following is a brief rundown on its pros and cons.

Pros – Almost Anyone With A Job And Bank Account Can Qualify For It

The beauty of a faxless cash advance is that almost anyone can qualify for it. The eligibility requirements are very simple. Besides the basic criteria, such as at least 18 years of age and US citizenship, you just need two things – a regular monthly income and a bank account. Though most payday loan companies prefer to approve loan to only salaried individuals with decent employment record and with a checking bank account, many other lenders these days welcome even those who only have a savings bank account and are either self employed or just have a regular source of monthly income. For example, even if you are not employed but receive a fixed amount of alimony payment every month, payday lenders will treat it as a regular source of income and your loan application will approved on that basis.

Pros – Even Bad Credit Is Not A Hurdle In Getting These Loans

Another attractive thing about a faxless cash advance that it does not care about your credit score. Whether you have a high or low credit score, it makes no difference as far as your eligibility for no fax payday loans are concerned. People with bad credit often have to face great difficulty in qualifying for a conventional loan, such as a personal loan or a short-term loan from credit unions. But, payday lenders do not make such ‘discrimination’. Payday loan companies consider your salary or any other regular monthly income as security against the loan.

Pros – The Loans Are Approved

Within A Matter Of Just A Few Hours

Probably, the best thing about a faxless cash advance is that it promises you quick money. That is the reason why payday loans, especially the faxless ones, have become hot favorite for lower and middle income class people who often find themselves in need of extra cash whenever they are met with some urgent financial requirements. Those who always follow a budget plan and maintain an emergency savings fund for such situations easily manage on their own, but others start looking out for easy sources of cash. This is where faxless payday loans look like the easiest option because it is not only easy to qualify but it also promises quick approval. You can have the money you need within 24 to 48 hours.

Cons – Extremely Expensive Financing Option

Most people who borrow faxless cash advance usually do not care to look at the negative aspects of these loans. Since they are already in an urgent need of extra cash and when a financing program offers the same through an easy and quick process, they tend to overlook the cons. But, it is very important for you to understand that a vast majority of payday loan borrowers regret their decisions at a later stage when they find themselves trapped into a vicious cycle of debt; many of them even have to use bankruptcy protection to get out of the debt hell created by the predatory payday cash advance. The reason why even organizations like the FTC (Federal Trade Commission) terms these loans as predatory is because these loans are extremely costly and companies have designed these loans in such a way that creates risky debt traps for the borrowers. The APR charged by payday loan companies can range anywhere from 200% per annum to 750% per annum. In some cases, the rates can be even higher. What is more, there are hefty additional fees as well that the borrowers are often not told about in advance. If you calculate the overall cost, you will be shocked to see that you may have to repay anywhere around $800 for a $500 of cash advance taken for a small period of fourteen days.

Cons – You Get Very Little Time To Arrange Fund To Ensure Timely Repayment Of The Loan

Since faxless cash advance programs are issued for a very short-period of time that usually ranges from one week to three weeks, a large number of borrowers often fail to repay the dues in time. As said earlier, a vast majority of the borrowers belong to low or middle income group, they find it very difficult to meet their repayment obligations. Most of them never plan in advance on how they are going to arrange the fund to ensure timely repayment. In fact, a large number of borrowers do not even think about the affordability aspect when they sign up for this type of loan. They do not care to take a minute and think whether they can practically afford that extremely costly loan.

Cons – Failure To Repay The Loan In Time Traps You Into A Vicious Cycle Of Debt

The worst thing starts happening after a borrower misses the scheduled due date for the repayment of the faxless cash advance. When this happens, the borrowers are bombarded with hefty penalty charges, and not to forget, additional interest charges at the same high rate. Many of them make their situation worse by borrowing another bigger cash advance to repay their existing payday debt. Such strategies only bring temporary relief, probably for a month. But, the next month, the borrowers have to deal with a much bigger debt monster. The cycle continues and eventually the borrowers find themselves on the verge of bankruptcy. It is very important for you to keep in mind that payday debts grow very fast. If there is a one-month delay in the repayment, you can expect to pay almost double or even more of the actual principal amount that was borrowed initially.

Overall, as we can see, despite the very fact that a faxless cash advance is easy to get, it does not at all make any financial sense. It is an extremely costly method to borrow money, which is not worth it considering the very fact that there are several better alternatives available out there.

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