In our current economy, it is sometimes difficult for people with poor credit to obtain a bank loan. With cash advance payday loans, all a person usually needs to have is proof of a steady income source, and a checking account. If these two items can be verified, the cash usually directly deposited into the borrower’s checking account within a few days.
The loan amount is usually limited to several hundred to a few thousand dollars, with a higher than normal interest rate, due to the risk. It does however, provide a way for people to get money for emergencies.
Things such as a medical emergency, a temporary layoff, a broken down vehicle needed for work, double glazing repairs, perhaps a new garden shed and family emergencies all require quick cash to rectify the situation. The payday cash advance loan concept serves these people at their time of need.
The terms of repayment usually requires repayment of the amount borrowed with interest at the next payday of the borrower. At that time the full amount is deducted from the borrower’s checking account. Lately, however, more lenient terms have been advanced by payday loan companies. It is sometimes difficult to come up with the entire amount of the loan so quickly, so other terms are being offered such as 30, 60, 90 and 365 loan payback periods, and monthly installment payments to satisfy the debt.
It actually makes sense for the lender to extend the payment period because they are finding that there is a better repayment rate from the borrowers, and the lender actually makes more money from the extended payments, which actually collect a bigger dollar amount of interest.
So you can picture a scenario such as this. A working class family suddenly has a baby that becomes quite ill. They take the baby to the emergency room, and then the baby is hospitalized. Even though the family has medical insurance, the deductibles and payments add up to about $4,000. There is no way that the family has that kind of money anywhere, but now they have a hospital bill to pay.
The family can come to a payday loan company who will evaluate the income of the family and its trustworthiness, and make the loan so the family can pay its obligations. When the arrangements to pay back the loan are put forth, it is likely that they will be allowed to make payments over a period of time to satisfy the loan. The payday loan industry is now regulated by the Financial Conduct Authority