By: Gaurav Bhola, MSM, Managing Editor
Payday loans are very tempting during the holidays. A payday loan is a short-term loan that gives you enough cash to get you by until your next paycheck. A cash advance for many provide a convenience denied to them from traditional financial institutions such as banks.
Today, payday lending has grown to gigantic proportions, offering billions of dollars in personal loans to consumers. In addition to consumer lending, the business community has been next in need of constant cash flow on a regular basis. Herein, payday loan lenders are offering business cash advances which work differently than a consumer loans.
Unlike payday loans for consumers which are expected to be paid back by the next payday through a checking, savings, or debit account, if not, high interest and fees can accrue.
The business cash advances are not expected to be paid from business checking or savings accounts. Instead, business owners can pay their loan obligations by debit cards or credit cards.
However, like consumers, business owners must remember that any payday loan, cash advance, short term loan, faxless cash advance, cash advance loan, payday advance, or no fax payday loan must only be sought during emergency cash flow crunches due to the accompanying high interest rates, penalties, and fees.
Remember, a cash advance loan is a post-dated check loan. Basically, you write a personal check for the emergency cash you are seeking, plus a fee. The payday lender then gives you a check for that amount minus the fee. But if you decide not to pay your loan back by the next payday, then additional fees and continued interest rates apply.
As payday lenders expand to other areas of the economy, you must remain vigilant when seeking cash loans. Make sure the lender discloses all costs associated with your payday loan, most importantly fees and interest rates. Also, make sure you have a good understanding of what happens when you rollover your payday loan beyond the original payback date.
It is critical that before you take out your next payday cash advance loan that you exhaust all other financial options. But in the same regard, many times these types of loan cater to people who have exhausted all other options of obtaining emergency cash funds.
In giving these short-term personal loans, the payday lending industry is providing a service to many consumers, long ignored by traditional financial institutions.
