Payday loans are a practical means of getting extra money to care for unexpected expenses that arise. However, many people are leery of these loans because of the high fees. Putting aside the fees for obtaining a short term personal loan, there are many advantages to cash advance loans. If you need extra cash, and have few options, payday loan companies offer an invaluable service. The key to avoiding high fees and keeping the loans cheap involves borrowing small sums and repaying on time.
Payday Cash Advance Loan Fees
Each cash advance loan company has the license to set their own loan fees. However, these fees must stay within a reasonable range. Typical cash advance loan fees range from $10 to $40 per $100. Lenders that charge outrageously high fees are often grouped into the same category as loan sharks or hard money lenders.
If borrowing small sums of money, flat fees pose minimum problems. The problem lies when applicants begin borrowing several hundred, even thousands of dollars. Some lenders cap loan amounts at $500. Meanwhile, other loan companies offer instant cash up to $1500.
Avoiding High Cost Cash Advance Loans
It is possible to avoid incurring an extremely high outstanding cash advance balance. When borrowing money, use common sense. Prior to applying and accepting a large sum of money, evaluate your own personal finances and judge whether you can realistically repay the money. If any doubts arise, do not accept the loan.
High cash advance loan fees are avoidable. Borrow only what is needed to pay for an expense. Sadly, some people borrow a little extra to help finance a shopping trip or vacation.
Borrowing too much can start a vicious cycle. If the loan is not repaid by the due date, usually within two weeks, the fees are doubled. For each day that the loan is not paid in full, late fees are also tacked onto the final balance.
Consequences for Failing to Repay Cash Advance Loan
Although cash advance loan companies do not check credit before approving a loan request, lenders do have the right to seek a non-payment judgment if the funds are not repaid. The applicant may become responsible for paying all court fees and lender attorney fees. In the end, the judge may order a garnishment of wages.