Payday Loans and Cash Advances

What Are Payday Loans?

Payday loans are defined as a kind of short term unsecured loan that is given before the actual pay date. These loans are given to employers to fulfill financial needs. In order to be qualified for a payday loan, you need to have a bank account, an ID, and your proof of income. Also, the age limit for having a payday loan is at least 18 years old. This amount of money is enough to cover the financial needs until the next pay date. Check to see if PayDay loans are legal in your state.

What Are Cash Advances?

A cash advance is the kind of service that is provided by the credit card company to its users. This allows the user to withdraw cash from the ATM or from the bank up to a certain limit. A cash advance has to be paid back to the bank at the given deadline. Many people have defined the term “seed cash advance” as buying cash just like regular goods. The cash advances are only applicable if approved by the credit card company.

Pros of Payday Loans:

There are many benefits of a payday loan. They are mentioned in detail below:

  • They are absolutely easy to have access to. They are better than the regular loans that take a long time to get approved. Payday loans take a minimum five minutes to get approved.
  • They do not have long, complicated requirements to get approved. All you need to have is an ID card, a proof for your source of income, an active bank account, and a proof that you are 18 years of age.
  • The company does not even check your credit for approval.
  • It is also an unsecured loan, which means that if you fail to pay the loan in the given deadline the lender cannot seize your property.

Cons of Payday Loans:

The cons of payday loans are:

  • They are expensive it means that they have a high-interest rate of about 400%.
  • Payday loans can be dangerous in terms of trapping their users in a cycle of debt. The lender doesn’t even check it whether you qualify for the loan or not, and wouldn’t help you build any credit.
  • Most of these payday loans targeted people with low income and are not legal in every state.
  • If you fail to pay your loan in your due date, the lenders cannot seize your property but they surely can sue you for the money that they owe you.

Pros of Cash Advances:

The pros of cash advance loans are also mentioned below:

  • Cash advance loans are short-term and expire within 14 days.
  • One can get the money within a day or less.
  • It is enough to cover your financial needs.

Cons of Cash Advances:

The cons of cash advance loans are also mentioned below:

  • They come with a high-interest-rates.
  • These cash advance loans are taken from your next salary.
  • It also makes the people who opt for this to find themselves in a cycle of debt.