Dangers of Defaulting With Cash Advance Payday Loans
Cash advance payday loan requirements
Job Certificate and your salary sheets are the two basic things that you require for the cash advance payday loans. These are cash advance required because ordinarily the lender will find out your eligibility for such short term loans. Your income should not normally be lower than $1,000 per month and it will be better if you have income of around $1,200 per month or more. It is also important to pay the EMI in time. Otherwise defaulting may lead you to neck deep ravine of insurmountable debt. That will be back to square one, a situation you were trying to get rid of.
Avoid mixing up
That is why it is not prudent to mix up the short term advances with other type of loans. Defaulting with other types may not hurt you as much as it hurts with the cash advance loans. They come with high interests and they are compounded as well. Defaulting will also defeat the purpose of legislations enacted by the Federal and State Governments to regulate such loans. Thus you can afford missing out the repayment installments with some long term loans but not with the short term loans. Cash advance loan can put you into debt problem just as quick as it comes to your rescue in sorting out immediate financial problems.
Do not be lured by wrong offers
The market, especially its online version on the nets, is full of lucrative ads floating there. These ads allure you to go for the cash advance loans. The terms and conditions they offer are so tempting that it becomes difficult for anyone needing money to ignore them. After all who would not like to have some easy extra money? You have to be extremely cautious and careful in selection of the advance type and even more, in selection of the financier online or in the brick and concrete store. At least you should ensure that such loans do not damage your credit score or financial conditions any further.
Cash advance types
Broadly speaking there are three types of cash advances that dominates the market. You can go for either of them. Just consider the options.
1. Payday loans from some shady lender.
2. Credit card advances.
3. Payday fast cash advance from local banks or financial institutions.
Avoid shady lenders
It is better for your financial health not to opt for the first option. Unless and until you have a clear idea about the background and reputation of the lender, you should not opt for advance or loan from such lender. These are unscrupulous traders who target the needy people having modest means. The loans they extend normally contain multiple hidden costs and fees while the interest rates are normally very high. An example is where the lender asks you for 19% interest overall. You accept the deal and obtain the advance only to find later that there are processing cost of $100 for a loan of $1000 that comes to additional 10%. Moreover there may also be penal interest even if you are defaulter only once. At 3.5% per month they will be 42% per year. In result you pay 42 + 19+ 10 = 71% interest instead of the mutually agreed 19% in such cases.
Dishonest lender can bleed you white
Even worse is the case where the lender compounds the interests and adds it to the principal. In such case the principal will sky rocket with interests added to it forming part of the principal every quarter and you might well end up paying $10,000 to repay a $1,000 advance you have taken. The only way out is to find out one of the reliable cash advance lenders for your purpose.