Thursday, June 10, 2010

When payday advances may make sense

Clients have often come to me with tales of woe after receiving a payday advance. I’ve been to many meetings where these companies were raked over the coals because they seemingly exploited the poor just to make a buck. We’ve also had clients who have come in shouting the praises of getting an advance.

All of us have had small emergencies when we were out of cash. Maybe it’s a prescription for a sick child or an ill-timed car repair. The fortunate of us can whip out a credit card and worry about the bill later in the month.

Someone with limited income won’t have a credit card or be able to get a traditional loan. The situation may force someone to look at payday advances.

It is easy for a borrower to get caught in a vicious cycle of debt and repayment. When this happens most borrowers eventually default on the loan.

The successful usage of payday advances depends on certain factors. In general, the main factors are the ability to repay the loan on the borrower’s next payday, use the loan only in times of emergencies and don’t obtain loans from more than one lender simultaneously.

The internet is used often as a way to convey information. It is also being used to explore mortgages and car loans. It makes sense that people would use the internet to research payday advances through companies like Money Now searches over 150 lenders to help you get the highest loan amount at the best interest rate. Sometimes it’s possible to receive funds within 1-2 hours.

On average, 4 out of 5 applications are approved. All information sent for loan applications is encrypted for privacy protection.

Most lenders will require anyone applying for a payday advance to be 18 or older, a U.S. citizen with a current job and valid checking account. Since Money Now is a multiple lender search engine each lender may have other requirements.  As always, review all terms as carefully as you would any other type of loan. 

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