Payroll advance is usually something that people in a financial fix utilize. This is a type of loan that can extend a person fast or immediate credit in a short span of time. Payroll advance is also known as payday loan, payday advance or even paycheck advance. Depending on the actual salary of the person asking for the loan, lending companies can extend anywhere from $100 to $500 per transaction, sometimes more.
It should be noted though that payroll advance has a rather steep service charge – most short-term loans do. For a $100 loan, lending companies can charge about $15 or more. The one reason that people patronize payroll advance is convenience. As long as the required documents are submitted to the lending company, patrons can have their loans in as little as a few hours.
Obviously, there are other less costly alternatives to acquiring a loan. However, most have a few glitches or two that makes payroll advance policies more attractive. Here is a list of viable options for people in need of immediate cash; and why people still prefer payroll advances.
1. Hocking stuff to a pawnbroker – that is, if you actually have anything of value to hock. If a person has nothing that is worth pawning, then he or she might have a bit of a problem here. Besides, a loan of this type is heavily dependent on the assessed value of the item being pawned. Very rarely can a person acquire a $500 loan on a small item. Also, pawnbrokers would require physical collateral in exchange for a loan; whereas the payroll advance can offered unsecured loans in an instant.
When it comes to mode of payment, a person with payroll advance, who cannot pay on the agreed date, can simply let the lending company cash in the payment check. On the other hand, a person with a pawned item, who is also in the same predicament, can lose the hocked item as soon as the deadline passes.
2. Asking for bank overdraft protection, credit payment plans, credit union loans, extensions of credit limits from credit card companies and small consumer loans, may afford the person asking for the loan lower interest rates and friendlier re-payment plans. However, these take time to get reviewed and approved, if it gets approved at all. With the case of credit union loans, there are very stringent measures when it comes to loans and very often, immediate loans are denied.
Any type of lending from the banks and other financial institutions also take a long time to be approved – and there are many papers to submit. Your current credit standing also plays a big role as to whether or not you will get a higher credit limit or a bank overdraft protection.
Payroll advance can afford the person almost instant cash, regardless of credit rating. As long as there is a pay stub to submit, a bank account number to subscribe to, and a check that covers all expenses, a loan can be quickly granted.