Payday Loan Responsibility
Cash advance and payday loan services, which are also commonly known as paycheck advances
, personal loans and pay advance services are becoming a hot topic in local and Federal government. A payday loan advance is a fee based financial service that provides an individual with an unsecured, short-term cash advance until their next payday.To qualify, you must be 18 years of age or over, a United States citizen, and have a provable income of one thousand dollars a month. Once you're approved for the cash advance, the payday loan amount will be electronically deposited into your checking or savings account, or a check can be cut in your name.
A payday loan can be applied for either online (there are multiple online cash advance services), via a telephone service, or, in some states, an actual pay advance store front. They are very easy to obtain, making the convenience very worthwhile for many people who find they need money quickly for urgent things.
Some of the reasons people find they need payday loan services are for urgent medical expenses and medications, car repairs, bills that are due before they receive their next paycheck and are unable to postpone payment of said bill, water heaters that go out unexpectedly, etc. The list can go on and on.
Even though lenders advertise that people don't use these loans for frivolous purchases, the practice of these services however has come under fire recently. But there are two sides to every story.
While there are many advocates of the service, there are almost as many disparagers.
While the users of the service praise its ease of use and availability, its critics evoke harsh criticism of high fees and the allure of being able to repeatedly borrow money from these services.
The industry is being dubbed as predatory, that they are trying to make people poorer with the high fees. As with anything, convenience is always more expensive.
For instance, we pay more for gas at the gas stations that are located closest to the freeway on and off ramps. Prices are higher at "convenience" stores than they would be if you purchased the same item at a grocery store.
The interest rates are not considered much of a problem if the loan is paid back within just a couple of weeks. However, when people do not pay it back promptly, then it can become a problem.
Some local government has even gone as far as to banish the service from their state, and the issue has even come up in big government. The biggest issue with these cash advance and payday loan services is actually personal responsibility.
First, an individual needs to educate themselves to how the service works. Secondly, one must decide the proper usage of the service.
As an example of a proper usage, an individual may apply for a cash advance to avoid late charges on a credit card, and also avoid the harmful damage a missed payment can do to their credit rating. If one is utilizing the service for the sake of having extra cash or to take a vacation, or to partake in something they really can't afford, the service can then become destructive.
The same common sense and personal responsibility should be applied to this service as one would apply to credit card use or any other type of loans. Establishing needs as opposed to wants is very important in making a proper decision with the service.
While proper usage of the service can be helpful, especially in emergency circumstances, improper uses of cash advances can lead to a reliance on the service, heavy fees and lead to more destructive financial problems.
When it comes to payday loans and cash advances, just like any other financial service, understanding your options and educating yourself is always the most prudent way to move ahead.
by: Jack Landry