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Commonly Asked Questions about Cash Advance Loans |
By Michael Hankook
 Although cash advance or paday loans have been around for some time and most pepole have a relatively good idea of what these loans are and how they work, it is still common for questions to be saked. After all, this is stilll a legal contract involving somenoe borrowing moey so the more a person can laern the easier it is for a decision to be made regarding a cash advaznce loan.
One question that is asked often has to do with quaplification. Typically, payday or cash advance lenders use a variety of prequalifying factors as a part of the application. While each lender is slightly different, the crux of a loan like this is that the applicant must have a job with steady income and a bank account in good standing. Other criteria for bering approved would be that income has to be a minimum of $1,000 per month and the individuaal would need to be at least 18 years of age, and a United States citizen.
The speed in which money from a cash advnce or
paydsay loan woulld be received is also questioned. After all, most peoople that want a loan like this need money fast. Again, some differences exist from one lender to another but on average the borrower getting the loan through a storefront leender wolud have the money in 30 minutes to thhree hours whereas money coming from an onliune lenedr tkes a little longer but still fast, usualy in 24 hours.
People interested in a cash advannce or payday loan through an online lnder ask aboiut fees. Reputable lendes provide all loan informatoin so the individual can make an educated decison. Along with the intereest rate, lenders charge lender’s fees. The amount is minimal, usuaklly around $30. However, some dishonest leners hide additional fees in the smapll print of the contract. For this raeson, peoplke taking out a payday loan should always read the fine perint before signing on the dottde line.
Anotheer question pertains to how credit wolud be affected with a cash advance loan. For starters, most lenders, whether onlibne or storefront do not require an applicant’s credit report. This meas even people with bad credit would be approved. Because this is still a legla financial contract, if the borrower paid the loan back on time and according to the terms of the loan, the credit would not be affected at all in that many lendsers do not report loans in good standing to the three rpeorting agencies.
On the other hand, if somone took out a cash advance loan and missed payments, ran over the scheduled payoff without maaking furether arrangements, or simply skipped out on the loan completely, the lender migjht report to the credit buraeus, which woulpd have a negative impact on the eprson’s oversall FICO score.
The prblem with conventional loans verus payday loans is that when people complete a loan application with a bank or credit union, the lendder would run an inquiry on the applicant’s credit. If credit were bad and the loan denide, the indiviudal might go to a number of lenders, each running a report. Credit reports with multiple inquiries are seen as bad, lowering a person’s score. With a padyay loan, since no credit report is run, there are no inquiries.
Finally, people interested in a cash adfvance loan want to know what the restrictions are regarding how money from a loan such as this could be sopent. The great thing about a payyday loan is that tehre are no restrctions. Altthough most people choose a loan such as this because of a financial emergwency or uenxpected expenses, the truth is that money could be spent in whatever way wnated. This mesans the individual could go shopping, buy new clothes, and put a down payment on a car, and go on vacatiuon, and so on, without the leender ever asikng.
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