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Payday Loans: A better solution for the average American worker.
By Danielle Peck
What are the advantages to taking a payday loan, and what are the costs? This article explores the business of cash advance, while examining the more traditional venues of credit cards and banks.
With the New Year upon us and Christmas bills starting to pile up,
countless Americans are wondering how they will pay the bills and
cover the taxes due in April. Payday loans are one solution to
individuals feeling the crunch of bills and taxes. A cash advance
will enable you to pay those bills and take care of impending
circumstances without over-extending your credit cards or racking up
non-sufficient fund fees. This source of fast cash is used by many
Americans to eliminate the long-term high cost of credit card interest
rates while providing an instant cash solution for their pressing
needs.
Why would you consider a payday loan? That is the question many
American workers ask when they are looking for a solution to their
bills, and unfortunately, those working class individuals without
pristine credit are shut out of traditional options like low interest
rate credit cards and home equity lines. The payday cash loan has
become a practical option for individuals experiencing a financial
emergency.
To meet the requirements for a payday loan, most cash advance
services require you to meet a few qualifications. First, you need to
be at least 18 years of age and a United States citizen. Second, you
need to have a job or be able to show that you receive some kind of
regular income, which brings in at least $1000 each month. Third, you
must have a checking account (a few will qualify you with a savings
account) to finalize the transaction. Some companies will include
additional requirements, but these are the most common prerequisites
to obtain a payday advance. If you meet these conditions, you
generally have to fill out the company¡¯s online form to find out how
much you will qualify to receive. They, like nearly all lending
institutions, will gauge the amount you may borrow by the amount of
your income, although, unlike most lending institutions, these
companies are much more lenient in their lending practices. In
general, the majority of the online payday advance companies do not
disqualify you because of bad credit, bankruptcy history, or prior bad
checks.
There are no long lines and no long delays while the company
reviews your application. In addition, this process takes place in
the comfort of your own home or office, not the cold atmosphere of a
bank. Most companies have a relatively simple and quick online form
for you to fill out, and once your loan is approved and you speak with
a representative, the company deposits cash directly into your bank
account. Make sure you review the website completely, and read the
details. Do you find the fees fair, and are the terms acceptable?
In order to receive a cash advance, companies require you to have a
bank account because when it is time to pay back the loan, the company
will simply deduct the principle and fees from your account during
your next pay period unless you ask for an extension. Now the fees
seem extremely high for this service unless you do the math on how
much it will cost you not to take the short-term loan. What did you
pay for your last bounced check? Most banks charge between $25-$35,
and often times merchants charge a matching fee. The expense of a
payday loan does not sound nearly as bad once you consider the bank
charges and credit reporting that takes place when you bounce a check.
If your credit card company were going to charge you a $29 late fee
and raise your interest rate, wouldn¡¯t you be better served to take
an advance on your paycheck rather than take the long-term
consequences of higher interest rates? Of course, there are payday
loan companies that are out there to take advantage of unsuspecting
consumers, and that is why you must do your homework and make sure the
fees and terms are acceptable.
Lately, many news articles have criticized the payday loan
industry, yet these same reporters have not questioned the excessive
fees and interest rates charged by traditional lending institutions.
Obviously, it is in the best interest of banks and credit card
companies if consumers continue to accept their Machiavellian policies
(remember Machiavelli advocated deceit to gain and maintain power).
Non-traditional lending companies challenge this totalitarian
authority and give the working class another option besides paying
outrageous credit card fees, bank fees, and unwarranted interest
rates.
Danielle Peck is the partner and research specialist for www.skitastic.com, a website that provides information and resources on cash advance and payday loans. You can visit the website at: http://www.skitastic.com.
About the Author
Danielle Peck has a Degree in Sociology, and spends much of her time examining new phenomena in culture. Her main goals in this pursuit encompass both social and personal change while finding the link that makes us all human in the twenty-first century.
Article Source: http://www.simplysearch4it.com/article/19524.html
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