Cash advance has grow in popularity even in this falling economy.This type of loan require that those who borrow money to provide a proof of income after which the lender will be able to offer or not a certain amount of money.
The disadvantage of taking up cash advance loans is the high amount of fees associated with them. The fees and interest rates applicable to cash advance loans can end up being higher than cash advance on credit cards. In a typical case of a cash advance loan, a borrower writes a personal check for $100 to $300 payable to a check casher. The fee is usually from $15 to $17.65 per $100 borrowed. The check casher agrees to hold the check until the borrower's next payday, usually one week to one month later.
For example Florida and Texas law allows the practice of this type of loan, with $500 the maximum amount and the duration between seven and 31 days. The fee for such loan can not exceed 10%.
Cash advance is a short term loan, where those who borrow do so on the basis of what will receive. In Florida,Texas and other states are many people who disagree with such loans, but even so where the law allows, both customers and companies are extremely pleased with this type of loan.
Lenders are required to provide notices to at-risk borrowers and Florida laws also says borrowers who default on their loans may qualify for a 60-day grace period as long as the borrower completes an approved consumer credit counseling program.
People use cash advance to pay off electric and phone bills that are due when they run short on cash. The cash advance serves the purpose quite well but also poses the potential danger of a never-ending cycle of debt.
It is important for consumers to realize that they have to payoff their cash advance loan on time and not extend it for the next week. If they do not do so, they will get into the web of debt that will keep on spiraling for a long time.