When it comes to payday loans they can be referred to by a variety of different names such as a deferred deposit or cash advance. The average payday loan is usually between 300 and 400 dollars. Payday loans are short-term and they come with extremely high interest rates. A payday loan is typically supposed to be paid back on the individual’s next paycheck but the payments can be spread over six months. Paying the loan back over six months will cause the interest to be even higher. The only qualifications that an individual needs to get a payday loan are proof that they have a job and an active bank account. The type of individuals who usually get a payday loan are individuals with no credit history or bad credit.
How Do Cash Advances Work
When an individual applies for a payday loan they will provide the payday lender with all the proper information that is requested from them. The payday lender will then make the proper confirmation of the income and that the individual has an active good standing checking account. This process takes the payday lender around 15 to 20 minutes to verify all of the information. Once the information is verified the payday lender will give the individual the cash or deposit the money into the individual’s bank account in the next 24 hours if the payday loan was done online. The payday lender will also ask the individual who is getting the payday loan for a blank check so they can have the permission to electronically withdraw the loan from the individual’s bank account within two weeks, a month, and in most cases in monthly installments. Payday lending companies are now starting to use debit cards instead of blank checks.
When individuals take out their payday loan at a brick-and-mortar location the payday lender will give them a specific date to come and repay the loan or make a payment on the loan. If the individual decides not to show up or can not show up to make a loan payment in person the lender will then run the check or debit card to withdraw the loan plus interest. If the loan was taken out online the online lender will just initiate an electronic withdrawal. It is important to know that with online payday loans the payday lender has the right to sell your loan to another loan company or a broker. If you have to take out a loan the best way to do it is either at a brick-and-mortar location or through a direct lender because this avoids the extra cost and the chance of the individual becoming a victim of fraud.