Payday Advance Loans
There are times in a person’s life that unplanned things happen. Somebody in the family gets sick, or there is a school project for the kids and a lot of different things that sometimes we don’t plan for. That is why people find themselves in a situation that their monthly income is not enough to cover for these eventualities that are on top of their monthly expenses. There are solutions available for these kinds of instances.
Some gets cash advance from credit cards, which is the most common. But for those who already maximized their credit cards, there is also what is called payday advance loans. These are short term loans and are normally offered in small denominations because of the idea behind the creation of these kinds of loans.
The idea behind is that the borrower made a mistake in budgeting that is why he or she needs to make a short term loan. But the problem would be resolved the following month. That is why payday advance loans are paid the next payday and this is also the reason why they are called payday advance loans.
Payday advance loans normally charge significantly higher interest rates than that of a regular loan in a bank. The interest rates for them are even higher than the interest rate charged by credit card companies. Some people might ask why people still subscribe to this if the interest is too low. The answer is convenience. Sometimes, whatever we do, there really aren’t any alternative available out there. And payday advance loans are not meant to be taken on a regular basis.
The idea is this is something that you make in cases of emergencies. So if you pay a high interest now, not only are you paying for the finance charge of the loan amount, you are paying for the ease of applying for the loan and the immediate processing. It makes the money available to you in a very short period of time. Something that banks will not be able to offer because of the rigid loan processing, especially after what happened with the last financial crisis.
In other people’s stand point this loan is highly usurious but for people who really need fast cash, the interest rate that they charge compensates for all the benefits that it would be able to provide. In marketing, it is all about perception. When the need is great, then the value for the cash advance would be immense to the perception of the borrower. But since the interest rate would still be felt, then it would serve as a lesson as well.
A lesson to do personal budgeting and know a bit about personal finance to ensure that you will not find yourself in another situation that you would feel obliged to settle for a high interest bearing obligation. Until you are able to handle your finances well, these kinds of loans still serve as an option to a lot of people including yourself.
