Approved Cash Advance

Also known as payday loans, approved cash advance lenders provide employed individuals with much needed funds for a short term. Loan companies charge borrowers with proof of employment a high interest rate for lending money for a two-week period, which is repaid when the employee gets his or her paycheck. In hard economic times, an increasing number of workers are finding that there is more month than money. Higher prices for gas at the pump and food at the grocer are putting the squeeze on the nation's working class and creating a new sector of middle class poor. And while prices are on the rise, paychecks seem to be getting smaller; and making ends meet has become a formidable challenge. Many employees turn to approved cash advance services to borrow money from their own paychecks to meet unexpected expenses or past due bills.

Bad things really do happen to good people; and in a pinch payday loans can be an asset if handled wisely. Unexpected medical and dental bills, higher monthly utility bills, and appliances that go on the blink are all unavoidable emergencies that can stretch a paycheck to its limits. Borrowing against anticipated earnings might not be a bad idea when workers don't have substantial savings or a rich relative to cover unexpected expenses; and the process is relatively painless. Payday loan companies usually require borrowers to show proof of income, such as a pay stub, along with bank statements. Most companies also require borrowers to have a minimum number of months on the job to verify steady employment. Borrowers who transact short term approved cash advance loans of an average $100 to $500 secure the loan with a post-dated check or promissory note to repay the original loan, plus interest and fees, within a two-week period. Fees can range from 15 to 30 percent of the amount borrowed. At the end of the term, cash advance companies have the option of processing the post-dated check through the borrower's bank or waiting for borrowers to appear in person to pay up. Borrowers who repay loans on time are helped out of a bad financial situation, which will hopefully improve through wiser money management or additional income.

Approved cash advance or payday loans are also offered online with transactions carried out electronically. Cyberspace consumers can apply and qualify for payday advances by providing bank account and routing numbers, Social Security numbers, and employment information. Once an application has been tentatively approved online, borrowers simply fax copies of a cancelled check to verify banking information, along with a signed loan agreement. Web-based cash advance vendors deposit funds into the borrower's checking account and withdraw funds for repayment at the end of the term, usually the employee's next pay period. Since transactions are process electronically, online payday loans may be a better option than onsite transactions, especially for those employees who have direct-deposited paychecks. However, the ease of transacting online payday loans may tempt employees to borrow more money than they can easily repay without further crimping a cash-strapped budget.

The obvious downside to transacting approved cash advance loans is that a borrower's inability to repay the short term loan can seriously jeopardize financial security. When individuals have to borrow from Peter to pay Paul, they may find themselves into a financial fix! "The rich ruleth over the poor, and the borrower is servant to the lender" (Proverbs 22:7). Unfortunately, if the borrower's bank account has insufficient funds at the time payday loan companies process the post-dated check, the borrower can incur NSF fees from the company and the bank! Here's an example: Mary borrows $300 from a payday loan service and promises to repay $345 within two weeks. On payday, if Mary doesn't return to the shop to repay the loan, the firm can process Mary's check to collect. If Mary is already strapped for cash and uses the paycheck to cover other bills, the bank account has an insufficient balance to cover an approved cash advance loan, and the check bounces. Mary will owe the bank an NSF fee of at least $25, plus an additional fee of $25 or more to the loan company, plus the original $345, plus late fees and additional interest. An original loan of $345 could wind up costing Mary close to $500. By law, some states require loan firms to offer borrowers an option to repay defaulted loans via an extended payment plan, but such a plan may still place a borrower in serious financial jeopardy.

Because of concerns about borrowers who may experience severe financial difficulty as a result of approved cash advance practices and the excessive profits realized by lenders, state legislators have imposed strict limitations on companies that offer payday loans. Some domestic and foreign governments cite these kinds of loans as predatory lending and have outlawed payday advances, while others limit the amount of annual percentage rate (APR) lenders can charge. Borrowers who find themselves in the unfortunate position of having to obtain an approved cash advance may be wise to try other options for securing fast cash. If satisfactory payment arrangements cannot be made for unexpected expenses, such as medical and dental bills or utilities, ask employers about getting an advance and repaying it in small installments. Other options include borrowing funds from family members and friends, getting a small signature loan from a bank or credit union, or selling possessions of value on Internet bartering websites, flea markets, or yard sales. Bad things do happen to good people, but temporary bailouts that result in long term financial bondage should be avoided at all costs.

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