People have always been skeptical
about that which they do not understand. In 1946, Darryl Zanuck stated: "Television
won't last because people will soon get tired of staring at a plywood box every
night." In 1977, Ken Olson, the founder of Digital Equipment Corp.,
argued, "There is no reason anyone would want a computer in their
home." While we may laugh at them now, these men and their opinions
were respected and believed to be true. Ignorance led to narrow-mindedness and
bad judgment.
Sadly, this still happens today. One
example of this is paycheck loans and advances. These new services are designed
to help people who, for circumstances outside of their control, need some extra
help. Some, however, would like to dismiss them as useless before they take the
time to actually learn all of the facts.
So what are the facts about paycheck
advances and loans? A payday loan is simply a short-term loan supplied to help
a family or individual until their next paycheck comes in. No one can foresee
the future and there is sometimes no way to prepare for what life may throw at
you. Whether it is a family emergency or an unexpected bill, these loans can
get people the money they need faster than any other financial institution.
This loan can be repaid either on
their next payday, in increments, or at a later due date. These loans are for
responsible individuals who have steady jobs and are over the age of eighteen.
As the loan amounts typically do not exceed $1,000, the paperwork and
requirements are not as overwhelming as banks. Some banks may charge $35 for
over-drafting by only a couple cents and if you continue to do this, they may
cut you off.
Payday advance loans are regulated
by the state and it is important that you choose a company that follows the
state rules, regulations, and federal laws. In Minnesota, the Attorney General
is suing five payday lenders because of illegal practices. These companies were
extending paycheck repayments and raising interest rates to 782%. Do not let
yourself be taken advantage of by dealing with unlicensed paycheck advance
lenders. Many states have placed a cap on interest rates to protect consumers
for this type of extortion.
Some avoid using payday loans
because they fear it will affect their credit score. Basing their decision on
that assumption, they don't ask for help when they need it. Depending on the
loan company, a credit check may not be required to receive the loan or the
cash advance. If this is the case, it will not affect your credit rating as
long as you are working on repaying the loan. Payday loans also do not require
collateral. Collateral is defined as property or assets offered to secure a
loan.
Knowing the facts will help you make
an educated decision in regards to payday online loans. While the media is
quick to vilify these loans, it is important to realize that they are an
important tool for emergency situations. In fact, in 1996 the California
government authorized the practice, stating that they were a "secure,
small emergency loans without the red tape."
The ease and speed of the
application and approval process, the freedom of how you use the money, and the
flexibility of how you repay it are why more and more families are turning to
paycheck advance companies to help them in difficult circumstances.
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