Understanding Payday Loans, Cash Advances, and Installment Loans

Payday loans are short-term cash loans in which the borrower issues a personal check for the amount borrowed plus the interest charge in exchange for cash. As the borrower receives the cash loan, the lender will keep the check until the borrower’s next payday when he will pay the loan plus the interest charge in lump sum. The borrower can redeem the check by paying the loan with cash or allow the check to be deposited at the bank or pay the interest charge to roll the loan over for another pay period – these are measures which the borrower can pay his cash loan. Depending on each state law, the range of payday loans is from $100 to $1,000. The typical interest charge ranges from $15 to $30 if it is a $100 loan and for a two-week loan, interest charge is 390 to 780% computed annually. In cases where the borrower applies for longer term of payday installment loans, the payday lender will require an authorization to electronically withdraw multiple payments, on each pay date, from the borrower’s bank account.

All it takes to get a payday cash loan are these prerequisites: borrower must have an open bank account in good standing, a steady source of income, and identification.

When a person, who is in need of cash due to an unforeseen budget necessity will almost always turn to cash advances just to remedy his/her budget issues. Basically, the cash advances can range from $100 to $500 or higher and will be paid on the next payday and interest rates will be computed according to the amount of loan.
The Path To Finding Better Loans

Availing for a cash advance, an agreement between borrower and lender is made, stipulating that the money lent will be paid back in full on the borrower’s next paycheck date, which is within 2 weeks. The lender will charge a rate of 15 to 30% of the amount borrowed and a post-dated check will be issued by the borrower to the lender containing the full amount of money borrowed plus the interest charge.
Lessons Learned About Loans

An installment loan is a loan which can be paid over a number of months, such that when you take out the loan, you will be given the time period in which you must repay the money. The borrowed amount of loan in installment loans start at a minimum of $3,000 and can be as large as $50,000, but can be availed under certain terms, which are: a contract between you and the lender to secure both parties concerned against missed payments or misconduct of any type, borrower must be at least 18 years of age, a bank account, and proof of income as an assurance that the borrower has a means of paying the loan.

News For This Month: Loans