ALL ABOUT LOANS: Payday loan

cash advance loan is. This type of loan is only for short term cash emergencies and not designed as solutions for long term financial problems. Cash advance loans are good for those who have bad credit scores and were rejected by traditional financial institutions, such as banks. Even if the credit score is low, it should not be a problem.

When the financial crisis hit the Australian economy, many people found themselves near the brink of bankruptcy. A lot of them also incurred bad credit ratings. This caused a lot of financial problems, particularly when people need to get loans fast. The typical scenario is that traditional, office-based lending institutions would first check the borrower's credit history. They would asses the borrowers’ financial standing if they have the capability to payback the loan on time in the next payday. Not only that, but the lenders also check if the borrowers are diligent in paying previous loans on time. If they fail in these meticulous credit checks, the lenders usually deny the loan applications.

Depending on different lending companies, cash advance loans vary in terms and conditions. Cash advance loan creditors are usually more lenient and less stringent to borrowers. If a person is a regular employee with a fixed income and has a bank account, chances are, he or she would be easily approved for a cash advance.

There are also limitations to cash advance loans. For instance, lending companies limit how much a person can borrow, depending on one’s income or salary. These firms also give higher than usual interest rates. This is to compensate for the high risk involved on their investment because they are giving financial support to most borrowers—without credit investigations and collateral—during their time of need. This cash advance is also paid as soon as the next payday arrives, since this is only designed for short term cash flow problems. If a cash advance loan is not paid by the borrower on time, higher charges are used by the lender.

Cash advances

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When you run low on cash between paydays, it is helpful to know that there are solutions to fit your needs. Everybody has emergency situations come up they hadn't planned on or budgeted for, but many people are left with the embarrassment of trying to raise money from friends and family. This can cause more questions and scrutiny than needed, when you already have a situation that might be causing you stress from a temporary cash shortage.

You can get a payday cash loan, if you fit the basic eligibility requirements, including being 18 years of age, holding a regular job, making at least a certain amount per month and having a bank account, besides being a resident of the UK. There are other questions that frequently come up when it comes to the simple application and approval process.

As a typical example of what a lender might offer. You can borrow increments of 40 pounds, starting at a minimum of 80 pounds. For every 100 pounds borrowed, there is a 25 pound fee incurred. Your first request can't exceed 400 pounds, but you might be approved for less. After you have repaid your first payday cash loan, you can apply for a loan amount up to 1000 pounds, if you need it. While you might not get approved for the full amount, you can get approval for a higher amount than you first received, in many cases. The loans are meant for people that get paid monthly instead of weekly and they aren't for the self-employed or unemployed.

The repayment schedule is offered with 4, 5 and 6 pay cycle plans, based on how much you are approved for. This is an option for lower monthly payments, although some people pay them in full sooner, without prepayment penalty. 80 pounds borrowed will be on the 4 cycle plan, while 120 and 160 pounds will be offered on the 5 cycle plan. Any loans that are 200 pounds or greater will be on the 6 cycle plan.

The way the repayment cycles work is that you pay only the interest on the first pay day, along with a fraction of the principal, split in equal parts.

When you receive your first pay cheque (falling at least 8 days after loan approval), the first repayment date occurs and then your next immediate payday is considered the second repayment date and the pattern continues until the loan is paid in full.

If you can't repay the loan on time, you can incur additional fees for collection, so it is important that you budget correctly. If a difficulty arises, you need to notify the company immediately because arrangements can be made to help you with repayment and you can ensure your account doesn't go into the collection process this way.

Of course, these aren't the type of loans that are meant for a long-term solution to financial problems and many people actually repay the loans before they are due, which can help save interest fees. The most frequently asked questions about a payday cash loan have answers that are straightforward and easy to understand. The important thing to know about them is that they are a great way to get the emergency cash you need, when something comes up between paydays.

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About the Author:
Richard Waterstone is an expert on a range of financial subjects. To find out more about Payday Loans visit his recommended website at http://www.lendingstream.co.uk/

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Wednesday, February 24, 2010

Cash Advance Loan Facts

Payday Cash Loan - Frequently Asked Questions

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