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The concept of cash advance loans has been around for quite some time. The idea is to take out a loan for a short term to use when no available funds are possible. The loan is supposed to be paid back by the time that the borrower gets a paycheck. This means that the loan usually has a payment term of two weeks or one that would last up to a month. The interest comes in the form of fees which must be paid together with the principal. If the term is extended, there would be additional fees as well.
Payday Loans in the Past
Lenders targeted industrial workers that were running low on cash. They borrowed from individual lenders who operated around the factories and workshops where they worked. As time went by, lenders started to set up their own offices where the borrowers would walk in to apply to get a loan.
How To Get a Payday Loan Now
Things have changed now. Direct lenders have adapted and keeping up with the changes in the modern world. The biggest change now is the fact that lenders mostly operate on the internet. They have set up their own websites and that is how people can apply in order to get a loan. You can also apply for a loan by using a website like SafeCashLoans.com .
What Online Business Means
So what does this change mean to the consumer like you? Here are some of the advantages of the use of the internet by legit lenders:
- It makes the application more convenient since it can be done anywhere.
- It makes the processing much faster.
- It simplifies the process.
- It removes the stigma of having to go to a legit lender’s office.
The Problem with Payday Loans
The use of the internet makes the application for a short term loan so much easier. That can lead to further problems, however. It makes it so much easier to get a cash advance loan now. This, together with the fact that it does not require any credit check, teletrack, faxing of documents and checks issued could lead to problems for the borrower.
If the borrower lacks some cash to pay bills monthly, this financial product might seem like a good idea. It is so easy to take out one anyway. The problem is that when payments start borrowers with a limited means would have a difficult time coping since their income is already strained. The problem is with the unusually high interest charged by direct lenders.
Best As The Last Option
In reality, a quick payday loan now would best be used as the last option. It is not smart to look at it as a solution whenever you experience a financial breakdown. Constant reliance on payday loans can make you fall into a cycle of borrowing and it would be very hard to get out of that situation.
Loans secured by wage assignments in particular bear a striking resemblance to the structure of payday loans. The “substantial in- jury” to consumers that led the FTC to ban mandatory wage assignments and other credit practices is mimicked by the effect of check holding or electronic bank account access. Borrowers who turn over access to their bank account lose control over whether to pay food, rent, or the payday loan if funds are insufficient for all three. Bank account access, like a wage assignment, causes “disruption of the family’s finances and make[s] it difficult for the debtor to purchase necessities.”
Category: Payday loans