4 Big Misconceptions about Cash Advance Services

8 September 2015

Mia Nelson

If you live from paycheck to paycheck like 40 percent of working adults in the United States, no one has to tell you what it is like to receive an unexpected bill or to see a sudden emergency need for cash. When you don't have money in savings or a wealthy family member to turn to, it is not always easy to get by when payday is still a long way away. This is why cash advance services are such a popular idea among consumers. Even though they are popular, there are a lot of misconceptions about these helpful businesses. 

Misconception: It is easy to get trapped in an endless cycle of payday loans. 

Fact: It is only easy to get trapped in a concurrent loan cycle if you do not start out as a responsible borrower when you accept your first cash advance. Always make sure that what you borrow is an amount that is easy to pay back on your next date of pay without leaving you short. If you do come up short, always readvance a lower amount and do so each week until you get the loan down to a repayable amount. 

Misconception: The lender will try to convince you to accept a large loan amount, even when you don't need it. 

Fact: The last thing a cash advance lender will do is try to convince you to take more money than what you can afford. This will almost always lead to concurrent readvancing, which is prohibited in some states over extended periods, and can leave it difficult for you to repay the loan at all. 

Misconception: Cash advances are the only loan type offered by a payday lender. 

Fact: Payday lenders actually often offer different types of short-term loans for their customers. Installment loans, which function like a cash advance but with smaller payments stretched over time, are one popular example. Additionally, title and equity loans are sometimes offered, which are loans given based on collateral property you already own. 

Misconception: There is no regulation on the fees charged by a cash advance store. 

Fact: Even though some states may not have guidelines in place for payday lenders, most of them do. Not only are interest rates often controlled by the state in which you live, but so are other finance charges and expenses. For example, in the state of Tennessee, a lender can only charge a finance fee of $17.65 for a $100 loan that has a term of two weeks. 

Getting to know the facts about payday lenders and cash advance services can help you fully understand their value to the average consumer, especially those who do live from paycheck to paycheck. If you would like to know more about cash advance services in general, stop by a local office and ask questions, discuss options, or get advice. You may also wish to find a service online, like http:/paydayexpressne.com.

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