If you are in dire and immediate need for money and the need could not wait until the day of your salary, you are left with one good option – take a cash advance loan. Cash advance has been designed to provide borrowers money at the soonest possible time. It is now one of the popular small personal loans available to borrowers.
Why People Need Such Loan
Many people search for small personal loans especially when they need cash abruptly. Some need such products on a regular basis especially if their needs could not wait until the next payday at work. Cash advance is one good available option, especially for employees whose companies or employers are offering such minor credit facilities as among employee perks. The payments are automatically debited from the paychecks of the employee/borrower.
Things That You Should Know
Statistics show that the number of people taking cash advance loans are constantly rising through the years. It is an indication that peoples’ salaries are often not sufficient to cover the spending needs of many employees. Before you consider taking a cash advance loan, you must be equipped with the necessary knowledge. Here is the basic information you should know about such small personal loans.
Ease Of Processing
Processing a cash advance loan is easier compared to processing other small personal loans from major financial institutions and banks. Step one would be finding a cash advance loan provider. Your office could be offering such facilities to employees or there might be a loan provider in your community.
Fill out the application forms, state the amount of loan and submit the required documents. Usually, for documentation purposes, you would be asked to furnish copies of your employment certificates, residency documents and identification papers.
Knowing The Terms And Conditions
Read or know the borrowing terms and conditions, which would be discussed to you by the lender’s personnel. Take note of the following data such as interest rates, maturity and penalties if ever the repayment is delayed.
You would be asked to issue a check, so before processing a cash advance loan, the lender might require borrowers to open a checking account in a reputable bank. You would be asked to issue a check bearing the principal amount and the incurred interest of the loan over an agreed upon period.
What Lender Would Expect From You
Usually, the lender would ask you to put a date that is a day after your salary to give you a day to make the repayments. For example, if you are borrowing $100 from a cash advance facility for a 10-day period, you may be asked to make a $115 check, bearing a 15% interest within 10 days.
If you fail to fund the check or make the repayment on the specified date, you are required to see the lender and renew the loan for another couple of days. Thus, the principal would be $115, and at a 15% interest rate for another 10-day period, you would be asked to write a new check worth $132.25.
As the maturity lengthens, so does the interest rate. That is one setback about cash advance transactions. That is also the reason why many people, no matter how immediate the need is, opt to stay away from such small personal loans.