How do payday loans, cash advances, payday advances or check cash advances work?
Payday loans are short term loans you can use to get through a rough spot. Before you use one, make sure you understand the costs and risks. This page gives you a quick overview of how payday loans work, and ideas on how to avoid them. Payday loans are small loans you can use when you are temporarily out of money. Most often, payday loans are short term loans (two weeks or so) for a modest amount of money (a few hundred pounds). Payday loans get a lot of criticism mainly because people always unfairly compare them to regular loans like you would get at a bank. Those are set up with monthly payments installments that you pay back over time. A payday loan is exactly as it sounds "Hey loan me a few dollars until my next pay". Which means in about 7 to 14 days later the full amount that you borrowed, plus the fee, must be paid back. So, of course, if you compare the two then the payday loan interest rate will appear extremely high. Many people say that comparing cash advance payday loans to regular traditional installment loans is apple and oranges. But I feel since they are actually both loans it more like comparing oranges to a grapefruit. But that was my little rant I needed to get off my chest. The truth is there is the potential for a lot of people to get in trouble with instant payday loans because they misuse them, keep renewing them, and become dependent on them. However when cash advances are use only as they are intended, like for emergencies (the car breaks down, the ac goes out, etc) they are an absolute life saver.
