Payday loans can be harnessed by consumers as potent financial tools that can help them get out of their financial bind. And since we are now witnessing an increase in the number of companies that provide this special form of sub prime lending service, more and more consumers are now seriously considering this financial option when faced with a wide range of financial problems and emergency situations.
So, how do we define instant payday loans?
Let us first establish the key features of this type of short term loan in order to properly appreciate its significance to consumers. This type of loan is also referred to as paycheck advance, cash advance or payday advance. Payday loans are short term loans that normally run for up 30 days. When the loan matures, the borrower is required to settle the loan plus a specified amount of interest. Payday loans are different from the paycheck advances that are normally provided by the employer. It is also different from the cash advance that you are normally entitled to as a credit card holder.
The payday advance that is provided by your employer is company-based and is governed by relevant policies of your company. Based on existing company policies, as an employee, you are entitled to receive a specified amount as paycheck advance. Depending on the existing policies of your company, you can receive a partial amount or the equivalent amount of your full salary as payday advance. Companies normally set a limit to the number of times that their employees can avail of this cash advance option. The employer normally does not charge for such cash advances and the same are normally debited to subsequent pay slips either in lump sum or on a staggered basis.
On the other hand, credit card cash advances are pre-established lines of credit offered to credit card holders. In the strictest sense, the concept of cash advance does not actually apply to this particular credit option as the applicant's salary is not part of the equation. Instead, the credit card company looks at the credit history of the borrower and decides on such application based on their findings. Thus, it is the credit rating of the borrower that comes into play when it comes to credit card cash advance, which is in all intents and purposes is actually a credit line that is attached to the credit card.
Finally, when it comes to instant payday loans, we are actually referring to the credit option that is intended as a stop-gap measure. It is designed to solve short term or temporary cash flow issues and must be settled within a short period of time. This means that the term of this type of short term loan would normally run for a couple of weeks or up to 30 days. Simple processing and fast turnaround are the key features of this credit option. Consumers are given enough leverage to respond to unfolding or emergency situations in a timely manner. In fact, consumers can gain access to much needed funds in just a few minutes if they decide to apply for instant payday loans.
