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Payday loans are sometimes also known as cash advances, payday advances or paycheck advances. These financial products are short term loans, usually the amount ranges from $100 to $500 but the amount can sometimes be higher. A customer can expect to pay back an amount somewhere between $15 to $30 per $100 borrowed. When you think about this in terms of APR the rates are between 300 to 800 percent. Paycheck advances have have been on the recieving end of a lot of bad press in recent times. This is mostly due to the questionable practices carried out by paycheck advance companies. The practice that receives the most criticism is the high rates of interest of payday advances. The high rates of interest are placed as the loan amounts are smaller than traditional loans and borrowed over a short time period and this means that payday loan companies would not make a profit by charging rates that are similar to typical loans. Another reason payday loans are often considered scams is that borrowers can potentially end up stuck in a spiral of debt and it can sometimes be difficult to pay back the loan. Because of this, customers must make sure they are able to pay off the loan come their next payday. It is vital that customers have a financial plan set up and do not take out a payday advance (or any loan) without thinking it through first. As you can see, it is easy to see why payday advances are often criticized. However, most applicants who make a payday loan application have already tried all other options available to them and most of the time, the only solution they have left to fix their money problem is to obtain a payday advance. In this situation they can be very useful and actually will save the customer money when compared to credit card fees.
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The author owns a number of financial sites. For more information and advice on no fax payday loans or faxless payday loans as they are often called, click on the above links.
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