Payday loans are extended to those who receive a regular paycheck. The borrowed amount is paid back when the borrower receives their paycheck. The amount that can be borrowed is based on income. One of the leading payday loan providers in the US is CashNetUSA.
When an application is made, the lender carries out some checks before advancing the borrower the money. They will ask usually ask for copies of the last three paychecks to verify that the borrower gets regular income and also to verify their place of work. They are also able to determine how much that they can lend an applicant. For security, most lenders ask for a postdated check they can deposit in case the loan is defaulted on.
CashNetUSA Fast Work
Once these checks are done, the lender advances the money to the borrower. This usually takes a day or less. Thanks to technological advances, a payday loan can be advanced within a few hours. This is because it is possible to apply online, get the approval online as well and get the funds disbursed via electronic payment systems.
Advantages of CashNetUSA Payday Loans
In addition to the above benefits, there are also other benefits of payday loans.
- There are usually processed very fast and thus they can prove to be a lifeline when one is hard pressed. Most companies offering these loans usually process them as fast as within 24 hours.
- They enable people who have no other source of credit to access it. Other forms of credit such as credit cards, banks loans, saving and credit societies and other financial institutions have policies and requirements that must be fulfilled before they can consider lending to an applicant. This cuts off those who are not in regular employment or those who earn low wages such as those who work for minimum wage.
- Payday loans are a contributor to the economic development of a state and country. They lend out millions. With the current dark economic climate, they have become the helping hand that has helped many get by when they cannot access credit from other sources. As they are recognized and licensed businesses, they do make a significant contribution to the economy in terms of the taxes they pay and those that are employed to work in the companies.
- Payday loans have also helped in keeping people away from the grip of loan sharks. Sometimes, despite careful planning and budgeting or more often than not for low income earners, the need arises to come up with money to take care of a situation and the money is needed fast. With limited options, one may consider taking a loan from a Shylock. They are also called loan sharks and with good reason; the interest rates they levy on their loans could swallow one and their finances whole like a shark would.
They operate differently, with some offering loans against items like share certificates, cars, mobile phones and high value electronic items like laptops. These loans are dispatched instantly, as fast as the same day or in 24 hours. This is just one in a desperate situation needs and they know that. They also know that such a person will not take the time to fully grasp the implication of a 30 percent rate or even higher. In the end, a loan of US$1,000 could cost up to US $ 390 in interest only at 30 percent per month for two months as the interest is compounded. It keeps getting higher if the borrower is still unable to pay in full with the result of losing what one has paid so far and the item offered as security.
Helping or Hindering
Payday loans are legal in countries like UK, US and several European countries. However, the specifics of their operations such as how much interest they can charge and the methods they can use to recover unpaid debt are largely unregulated.
Those who offer them have received criticism from some quarters for taking advantage of those that they lend to. Those who have leveled this criticism argue that these loans hinder rather than help those who go for them. This accusation is justified with the argument that those who go for these loans are low income wage earners who cannot access other forms of loans.
For instance, they cannot qualify for a credit card or other forms of credit that have lower interest rates. This, they argue, keeps borrowers in a cycle of debt and poverty because of such high interest. Payday loans interest rates are considerably higher than those of credit cards, banks and other financial institutions. Also, as the loan is paid back within a short time which is when the next paycheck is received, a borrower does not get a chance to use the money to invest in income generating activities that can improve their lot and make them independent so they remain reliant on low income and high interest loans.
Those who offer the loans defend the accusations with the argument that they lend to a high risk lot who earn little and who do not have steady income but rely on daily wages. They argue that they therefore have to adequately cover themselves against the high risk by charging high interest. They also say that they offer a vital service to people that banks and other institutions will not lend to.
Are CashNetUSA Payday Loans Good or Bad?
Whether payday loans are a help or a hindrance comes down to individual financial beliefs and practices. Some have used them to start off income generating activities that have brought them income which has made them self reliant. Others have found themselves in a debt trap when they have unable to pay up the loans and the amount has compounded with interest. It all comes down to having good financial sense.
CashNetUSA.com is fully compliant with the statutory requirements of running such as business. They do not charge exorbitant rates or resort to unlawful methods to recover unpaid debts. Most borrowers who turn to them for help will always return when they need to and refer others to them.