How to Get a Payday Cash Advance

When it comes to payday cash advances, there are two primary types of payday lenders.

The first type of payday lender is the physical payday loan store that you can find in most neighborhoods. To secure a payday loan from payday loan stores often will require that you provide a personal check written out for the amount of the loan plus any fees.

The lender then provides you with the payday cash advance either in the form of actual cash or a cash advance debit card.

The second type of cash advance lender is the online payday lender. For many consumers, online payday loans are more convenient than physical payday loan stores because borrowers can secure payday loans from the comfort of their own homes.

To secure an online payday loan, typically you will need to provide your checking or savings account information via a secure online form. Additionally, your bank account will need to have a direct deposit feature, allowing the payday lender to deposit the loan directly into your account.

How to Pay Back a Payday Cash Advance

The repayment period for payday loans typically is 14 to 31 days. Essentially, the borrower is expected to repay the loan by his or her next payday.

If you secured your payday loan from a physical payday loan store, you have a couple options for repaying the loan. You could repay the loan directly to the store and reclaim the check you had written. You also can simply allow the payday lender to cash the check in order to collect the loan amount.

If you secured your payday loan from an online payday lender, the most common way to repay the loan is to allow the payday lender to withdraw the loan amount directly from your account.

How Payday Cash Advance Fees are Calculated

Because payday loans are intended to be short-term loans, the fees associated with these types of loans often are higher than they are for other types of loans. When securing a payday loan, it is important to fully understand how these fees are calculated.

Most payday loan fees can range from 10 percent up to 30 percent of the amount of the loan.

For example, if you were to borrower $500 with a 15 percent fee, the payday loan finance charge would be $75. This finance charge would equate to an annual percentage rate, or APR, of 460 percent.

It is important to point out that the fee is included in the total loan amount. Therefore, in the example above, you would actually receive $425 after the $75 fee was taken from the $500 loan.

While the 460 percent APR might seem high, many people can probably handle the $75 fee. However, some payday loan borrowers get into trouble when they are unable to repay the payday loan by its original due date.

Most payday lenders will allow a borrower to roll-over a payday loan if he or she is not able to repay the loan. However, this move will cost the borrower another fee. In the example above, you would be charged another $75 to roll-over the loan.

At that point, the payday loan finance charges would total $150, which would equate to a 920 percent APR. If you continue to roll-over the loan, you could find yourself in a situation in which your payday loan fees actually surpass the original loan amount.

For this reason, it is essential that payday loan borrowers do everything they can to repay their payday loans by their original due dates and avoid rolling the payday loans over to an extended repayment period.