The rise of institutions providing payday advances has increased dramatically in recent times. Now they are a popular way for applicants to gain access to money for any situation with one speedy application, even if they have a negative credit history. Payday Loans can be sent to a borrowers bank account in less than a day, making them a powerful option when money is needed in emergency situations.

Although paycheck advances can be very useful, they can have a downside. The interest rates are very high with payments of $15 to $30 per $100 borrowed being standard. When you think about this in terms of APR this is very high. The high rates of repayment can make it hard for those who are having financial difficulty to pay back the loan. For this reason, payday advances are usually criticized for preying on those who are in financial crisis.

If a payday advances is not paid back on the due date, the applicant may have to pay a fine and the interest rate could increase, making it even more tricky to pay off. This means that borrowers could easily find themselves in a debt trap. For this reason it is important that borrowers are aware of this and have the cash set up to pay back the loan.

There are obviously downsides to applying for a payday advances but if they are that dangerous then why do people apply for them? They can actually be very useful for those who need small quantities of money in tricky situations. The rates of a payday advances are actually cheaper than getting into credit card overdraft fees. They can also be aquired very fast and even those with a bad credit history can get one.