Advantages and Disadvantages of Payday Loans

Your pay day (salary day) is yet to come and you are in need of money, what to do. You take a small sum of money as loan or advance and pay it back on your pay day. This is termed as Payday Loans. These loans amount somewhere between $100 and $500 and are usually due in two weeks. The interest rates of these loans are very high and go up to 400% annual percentage rates (APR). The fees of such loans average $15 for each $100 lent. These loans are sometimes also termed as cash advances.

There are some requirements to qualify for the payday loans. Now the procedure to apply for the loan is very simple and no paper work. No need to fax any document for the cash advance and the cash transfer to the checking account within 24 hours if you fulfil the requirements of the lender.

The repayment process is also very easy, the money will automatically withdrawn from your checking account when you got the salary. For this, you must have a checking account and earn atleast $1000.

When you need urgent cash then you also agree to pay its interest rate because the required amount is not very big and it can pay very easily.

Only the big disadvantage of advance cash is the interest rate. It is upto $30 per $100. The lender transfer the advance cash into your account even without any document, they are ready to take risk and without delay you get the amount you required. So they charge high rate per $100.