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Many people turn to short-term consumer loans when they are in need of quick funds. This money can be used to pay for electricity, food, emergency supplies and gas. There are no restrictions on how the money can be spent. That is why there is a lot of flexibility offered to the borrower.
There are many types of short-term consumer loans. Below is a list of some of those loans:
Payday Loans
A payday loan is a loan that one takes out before getting their paycheck. There are minimal requirements needed to get the loan, which is why they are appealing to many people. Many people who have been turned down from getting a personal loan have turned to payday loans.
However, even though it is a lot easier to get payday loans than other types of consumer loans, some people find that it is difficult to meet the minimum requirements. Lenders typically require that people submit documentation proving that they have a source of income, a bank account and their current address. Lending practices can vary from place to place.
Cash Advances
Cash advances are often used interchangeably with payday loans. However, there are differences between the two. A cash advance is typically secured with some type of credit. For example, some credit card companies give people the option of going to an ATM or bank and taking out cash.
The interest rates on cash advances are typically very high. There may not be a grace period for paying back the cash advance. Additionally, people typically have to pay high late fees.
Payday Advances
Payday advances may also be used interchangeably with payday loans. However, a payday advance is typically used to describe the act of paying an employee in advance. If a person applies for a payday advance from a market-based lender, then he or she is typically required to submit a proof of income. Borrowers are also required to adhere to all of the terms and conditions of the loan. This includes things such as interest rates, late charges and fees.
