Life is unpredictable. As a result, many of us have found ourselves in a position in which we needed money, but found ourselves without. In a weakened economy, a growing number of consumers have less-than-perfect credit, and procuring traditional financing can become difficult. In the event that cash is needed quickly, a cash advance is a responsible lending choice.
The requirements to receive a cash advance are minimal; lenders only supplicate that the borrower has no outstanding payday advances and is honest on their application. Furthermore, they must have current proof of income as this will serve as their proof of the ability to pay back. This responsible lending technique ensures that borrowers do not receive more money than they can reasonably pay back, and this helps increase their chances of increasing their credit score in the future.
What Can Cash Advances be Used For?
Those who are accustomed to traditional financing are used to being asked intricate questions regarding what the money is to be used for, but this is not true for cash advance funds. These lenders understand that life can easily throw a curve-ball at any consumer, and they only ask that borrowers provide them proof that they can pay them back, regardless of what the money was used for.
Credit Limits and Responsible Lending
The amount of cash advance available for a given consumer is dependent on various factors. Some lenders have preset limits, and others implement the use of a tier system that outlines how much a consumer can receive based on their income level.
Depending on the situation, borrowers may need a higher amount of an advance than some lenders are able to offer. While consumers may be tempted to employ the services of the lender offering the highest advance, lenders who take the time to counsel their borrowers do so knowing that they have their best interest in mind, and this type of responsible lending indicates an honest and trustworthy business.
Cash advances are popular because they eliminate the need to perform a credit check. Therefore, those with recent credit problems can receive the cash they need. In order to prove their commitment to the agreement, consumers are normally required to pay the money back when they receive their next paycheck. As a reward for doing so, they avoid fees and interest charges.
In a perfect world, all payday loans would be paid-in-full on the date of the next paycheck. Fortunately, responsible lending companies understand that there are circumstances that can prevent this from happening. In this case, they can grant a rollover, during which time the consumer is given an extension. While additional fees are normally associated with this type of extension, it can provide the borrower with the time they need to remedy an unexpected situation.
Cash advance facilities have their customers’ privacy in mind. These professionals understand that, even though the economy is not at its best, many consumers are embarrassed when they have to borrow money. Therefore, the visit, amount borrowed, repayment arrangement and other details regarding the transaction are kept strictly confidential.
Right to a Full Disclosure
One of the most important aspects of receiving responsible lending services is to be given a fair chance of a full disclosure. The Federal Truth in Lending Act requires that cash advance companies provide their borrowers with full details regarding the fee structure, interest rate and other charges that could be incurred. Through proper communication, both the lender and the borrower can achieve a positive business experience that will benefit everyone.