When someone needs cash fast, they may click on this link to learn more about one organization providing payday loans. These products are for customers who have not yet established credit or who have a low credit score because of late payments or other problems.
Usually, the borrower sets up a payment arrangement in which the full amount is automatically withdrawn from the checking account on the due date. The person is allowed to make early payments without any penalties. Companies with brick-and-mortar locations in the area may accept in-person payments. Increasingly, however, most of the transactions are completed online. That includes the application, funding of the loan into the checking account, and payments to the lender.
The Cash Advance Factor
Payday loans from companies like MoneyBoat are also called cash advance loans because, essentially, they function only as an advance on the next paycheck. They are not intended to be longer-term financial products paid back gradually over several months. Some employees of certain companies can actually receive a cash advance from their employer, but this is not an option available to everyone.
Affording the Repayment
Typically, borrowers who take out payday loans do not have any money in savings. They commonly are living paycheck to paycheck. For this reason, they must be sure they can pay the money back by the due date, and that can be problematic for some individuals. Some lending organizations allow the borrower to roll the loan over into a new one once or twice if the full payment cannot be made, but that cannot be done indefinitely.
The lending company may take steps to verify that the borrower can, indeed, afford the repayment. This might require submitting proof of monthly income in the form of pay stubs. A smaller amount may be offered if the amount requested on the application is viewed as too high.
Once a loan is repaid, the borrower should make a plan of action about how to build an emergency cash savings fund. That safety net then can be used for emergencies like auto repairs instead of having to borrow money.