Financially embattled consumers always have a fallback in the form of a cash advance loan. Also known as payday loan, the cash advance loan is a small, short-term loan that treats one's next paycheck as collateral. In other words, the borrower should repay the amount on the payday following the loan.



Reflecting the times, payday lending has become a thriving industry. From pawn shops to the Internet to check cashers, this financial option is just everywhere! As estimated by the Center for Responsible Lending, the United States had around 25,000 payday lending operations as of 2006; payday lending is already legitimate in 37 US states and counting.

Cash advance loans are beneficial in that they can bankroll the most urgent cash needs, i.e. emergencies and bill payments, until one's salary replenishes. Ultimately though, the use for the loan is left to the borrower's discretion. The loan won't affect one's credit in any case.

In order to procure a cash advance loan, one writes a post-dated personal check, to be cashed by the lender two weeks thereafter. It is enough time for the lender to anticipate the borrower's wages. In turn, the borrower immediately obtains the needed loan. For online cash advance loans, borrowers can retrieve the sum directly via their bank accounts.

To redeem the check, the borrower must pay particular finance charges plus the amount borrowed, all in cash. Or else the borrower may choose to renew or ?roll over? the loan by just paying for the finance charge, taking out another loan, or allowing the lender to cash the check.

Lenders often advance no more than $1,500, $500 on average. For every $100 borrowed, lenders usually charge $15 as fee.

cash advance loans soffer a better deal than most other credit options out there. The APR of a bounced check can soar to 1,409%; late utility bill payments to 1,203%; and late credit card payments to 965%.

Then again, one rarely incurs a 390% APR for a . To reach that rate, the borrower must renew the loan more than four times, the federal limit for payday cash advances. In most US states, no loan should be rolled over for more than eight weeks.

Furthermore, the ease in applying for a is another surefire draw. All a prospective borrower has to submit are an active checking account, identification documents, and above all, proof of a regular source of income. Other times, the loaner requires the latest bank statements and pay stubs to corroborate the person's ability to pay. Full-blown credit inquiries and interviews are generally out of the question.

This same process is even faster through the Internet. In recent years, many cash advance loan websites have mushroomed.

In contrast, one has to go to the moon and back just to obtain a personal loan. Bank loan officers are not unknown to mobilize intelligence services to conduct background checks into borrowers. With a , no one has to prove anything other than proof of employment or an active business.