Paycheck Advance

Paycheck advances are short-term financial management tools that, when used correctly, can help consumers avoid bouncing checks, making payments late or hurting their credit rating. This is a readily available service to most people in a financial crisis, as one's credit is not taken into effect. While these loans might seem like the easy solution, it is best to weigh all options, as well as to consider other possible sources of short-term funding.

These services are also known as a payday loans, cash advances, instant cash loans, payroll advances or paycheck loans. They are short-term loans taken against a future paycheck. Paycheck advances are available 24 hours a day if consumers apply online, or during regular business hours should the consumer choose to go to a store offering these services.

To receive an advance, one must meet the minimum requirements which include being at least 18 years old, having a checking account open and in use for at least 90 days and earning a minimum of $1200 per month. Finally, to receive a paycheck advance, the applicant cannot have a bankruptcy in progress, nor have any other unpaid amounts with another service. While these services do not conduct credit checks, they do employ risk assessments services to determine if the potential customer is current in other payments, or has outstanding paycheck advances with another service.

These loans have become even easier to obtain as many companies solicit business not just in storefronts, but also on the internet. While many companies will require that the applicant have access to a fax machine to submit required documentation, some companies may offer faxless options when they apply. Consumers will find out within an hour whether or not they have been approved for a paycheck advance with a particular company.

The loan amount may vary depending on income and other factors as determined by the individual lenders. However, most companies will be able to deposit the advance into the borrower's checking account, usually within one business day. A paycheck advance is meant to be a small, short-term loan, and will therefore never be greater than the next paycheck.

Advances come with high interest rates and fees attached. The terms should be clearly outlined in the contract. Furthermore, consumers may want to look into other possible financial solutions to their immediate need that may offer lower rates. Sometimes even a credit card advance could offer lower rates than a paycheck advance. Consumers should remember that even though others charge interest, it's important not to charge such fees when they lend to others. "He that putteth not out his money to usury, nor taketh reward against the innocent. He that doeth these things shall never be moved" (Psalm 15:5).

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