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Payday loans are also known as cash advances, payday advances or paycheck advances. These useful products are short term loans, where the amount of the loan varies between $100 to $500 but the amount can sometimes rise to $1500. A borrower can usually expect to pay back an amount somewhere between $15 to $30 per $100 borrowed. When you think about this in terms of APR this translates to rates of 300 to 800 percent. Payday advances have have been on the recieving end of a lot of bad press recently. This is probably because of the questionable practices done by paycheck advance institutions. The practice that receives the most amount of criticism is the high interest rates of payday loans. These high interest rates are charged because the loans are smaller than traditional loans and borrowed over a short time period and this means that payday advance institutions would not make any profit if they charged rates that are similar to typical loans. One other reason cash advances are often thought of as scams is that borrowers can potentially end up stuck in a circle of debt and it can sometimes be difficult to pay off the loan. For this reason, borrowers must ensure they are able to pay off the loan come their next payday. It is very important that borrowers have a financial plan in place and do not take out a cash advance (or any loan) without proper consideration. As you can see, it is clear why payday advances are often criticized. However, most customers who apply for payday loans have already tried all other options available to them and sometimes the only solution they have left to sort out their finances is to apply for a cash advance. In this situation payday advances are a good option and can actually save the borrower money when compared to credit card fees.
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The writer administrates a number of financial websites. For more information and advice on no fax payday loans or faxless payday loans as they are often called, visit the above links.
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