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Regardless of how financially responsible some people might be, there will always come a time when they could use fast cash advance payday loans to get out of a tight spot. This usually involves some sort of unforeseen occurrence that needs to be taken care of immediately and will require money to do so. For example, if your car breaks down or you need to pay for some unexpected medical bills and there still is a week until your next paycheck, you might want to look for a more immediate source of revenue. It is common during these situations for people to turn to advance payday loans as a means to get by.
What Are Payday Loans?
Loans which are not generally provided by banks, but instead are provided by companies known as direct lenders which offer a modest sum as a fast loan without the need for a lot of paperwork or waiting around.
Each company has different policies and offer different services, but most of these fast cash advance payday loans have similar characteristics: they are small loans, no larger than a few thousand dollars; they are short term, usually requiring that they be paid back within one or two weeks; they are accessible to most people since they have just a few basic requirements such as a stable source of income, proof of identity and a bank account.
The main advantage that all of these direct lenders boast is speed. Some of them can offer a loan to a person in as little as 24 hours, if their application gets approved without any issues. Some of them work entirely online and also mention the convenience of applying for a loan at home, without the need to wait in lines and submit tons of paperwork.
Why Do People Distrust Direct Lenders?
In theory, the idea of a loan that is accessible to almost anyone which can be provided without hassle in under a day sounds ideal and should be a valuable service for many people. However, plenty of people that are financially conscious still would rather avoid these payday loans unless absolutely necessary. There is an ongoing debate whether these fast cash advances are truly worth it, with one side praising their promptness and accessibility while the other warns against the hidden traps.
Indeed, a person can fall into a lot of traps if he is not careful when he is applying for such a loan. These advances are short term loans and should always be treated as such. There is a short window where the debt must be paid back entirely. This will range from company to company but usually is no larger than 20 days. Anyone that exceeds this limit will incur penalties in the form of additional lateness charges as well as increased interest. That person must now struggle to make the payments and the lenders are very quick to add more and more fees as more time passes. Most of the times people get these payday loans without thinking it through and they end up in a much worse financial bind than they were at the beginning.
While it might not be obvious at first, it is clear for anyone that takes the time to do some research by calculating the annual percentage rate (APR) that the interest rates and fees are much bigger than any standard loan that can be applied for at a bank. Eliminating all the red tape is just a way for the lenders to make their clients oblivious to the fact that they are placing themselves in a bad spot, from a financial standpoint. Online Payday Loans No Fax should always be treated as a last resort since they are likely to worsen the situation instead of making it better.
