Is A Paycheck Advance Right For You?

With a sinking economy, many people are finding it more and more difficult to make it to the next payday. Groceries need to be bought and utility bills need to be paid. Sometimes the only way to get through these times is a paycheck advance.

Unlike years ago when this service was mainly used by poor workers on the wrong side of the tracks, these loan companies now market themselves to professional workers of all genres. Before, these little offices were frequently found in dangerous sections of town, managed by employees who were almost scary looking. Now, these same companies have offices in some high end commercial office buildings in every city.

It's not that difficult to get approved for this type of loan, though requirements do vary from company to company. In general, you need to have a net income of about $1,000 a month, you must have a checking account, and you can only borrow amounts based on your paycheck. Loan amounts and limits are typically in the $150 - $1,000 range.

Interest rates are comparable with what you'd expect to pay if you were taking a cash advance from your credit card. These are unsecured loans, the interest is a bit high with an average of 15-25% depending on the loan term, but if your only option is taking out a loan or having your electricity turned off - the decision is a no-brainer.

These companies have a pretty significant web presence, too. This gives you a good opportunity to do some research and compare companies. Some will require that you fax in additional information after filling out the online application form. If you choose to work with an online company, you will have the money electronically credited to your checking account. Waiting periods vary between a few hours to an entire business day.

You probably won't need to undergo a traditional credit check becasue these companies use check a credit system that reports information specifically about open and overdue payday loans that you may currently have. In other words, if you have four open loans with other companies and you aren't paying them as promised, you won't be approved for another one.

If you find a local office you want to use, call first to what you need to bring with you. The forms are easy and it takes about a half hour to finish up. Sometimes you'll walk out with a check; other times you'll have to wait for the wire transfer to your bank.

This has turned into a competitive business so do research to make sure you're getting a good deal.

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