Cash Advance - Points to remember

Cash Advance is a new concept spreading quickly in the US market today. The easy availability of cash has made this scheme highly popular in the United States today. Walk into any street where such schemes are operative and you come out with $100, $500 and sometimes even $1000 as payday loans. The other name for these programs are "Quick Cash", "Quick Loan", "Car Title Loans" and "Cash Advance".The concept is not very old but they are starting to sprout up all over the country and will soon rival Starbucks by sheer number of locations. They are the new trends in predatory lending practices but are still managed under the state regulations. They don't charge interest; they charge a "fee". But it sounds like the ultimate in convenience.

Need some quick cash - A cash advance or payday/paycheck loan is often secured by a personal check. There are companies that may require your bank account or credit card information along with the check as the security. The check gives the lender the right to withdraw the amount payable, from your bank account after a certain period, that is, about 14 days. On completion of the agreement, you are offered a loan amount that requires a fee for its servicing. But before you proceed to avail a cash advance, just check out with the following points.

  1. Early repayment fee: You are required to pay this fee if you repay your loan before the allotted period.
  2. Late repayment fee: This is a fee you need to pay when you are repaying it late. You may have to pay the entire fee again if you miss the payment date.
  3. Membership fees: Some companies offer membership for which they require fees. This is in addition to charging fees from the usual customers.
  4. Account handling : Read twice before you sign any contract, as there can be hidden traps. It is better that you go through each sentence and clarify your doubts before signing any document related to the contract.
  5. Fine print (as in all contracts): This is important : whatever you do in your life, read twice before signing once.Either know what you are signing for or don't sign at all. Most of the times there are some hidden traps for you; go through each and every sentence on the papers. Don't hesitate to put queries and clear all your doubt before signing it.
  6. Bounced check or debit fees: Take care of your bank account before signing the document. Make sure you have money in the bank account, or you will have to pay the bank a certain amount of fee.
  7. Collateral requirements such as a car title: This is very dangerous if not done properly; you miss your payment and you may be missing your car permanently.

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Last Updated on: Thu, 13 Nov 2014