What are cash loans?

Cash loan is another term used for pay day loans. These loans are short term and thus have a high interest rate. These loans are offered for those who seem to find themselves out of cash in the last days of the month due to unforeseen expenditures that they had to incur. The cash loan or the pay day loan allows the borrower to avail cash against the applied loan within twenty four hours of the approval of the loan which spares them from long waits. Also, when an applicant applies for a cash loan, the notification of approval is sent to them within a few hours of their application. This allows these applicants to make timely alternative arrangements.

Cash loans are the perfect financial answer that allows borrowers to manage their money needs in a confidential and independent manner. Furthermore, all the money transactions through the pay day loans are managed online, which offers security and ease to the borrowers. However, people who use cash loans or pay day loans must keep in mind that these loans can end up in a debt trap and therefore, they should only borrow the amount that can be paid on time and without defaulting. In some of cases the late payment penalty fee can amount to three times the amount of the principal.

What are the selection criteria for the candidates of cash advance loans?

The selection criteria of pay day loans lending institutes may differ from one institution to another. This is the reason the applicants should make sure to read through the terms and conditions and the selection criterion information provided by these institutes. The main reason for this difference is that different cash loans offering institutes might be targeting a different market segment. However, some of the common cash loans selection criteria include:

1. Applicants/borrowers must be legal citizens
2. Applicants/borrowers must be equal to or more than eighteen years of age
3. Applicants/borrowers must be employed and/or have a regular source of income
4. Applicants/borrowers must have a bank account
5. Applicants/borrowers must not have a history of being ignorant to the repayment of such loans
6. Applicants/borrowers must have solid documents

It is important that applicants are completely honest when they are filling out the application forms for the cash loans. Every pay day loans offering company verifies the information provided by their applicants through their network of agencies. In cases where the provided information cannot be verified or is false, the applicants might have to face serious consequences.

Can applicants with weak credit history apply?

Even those individuals who who cannot borrow traditional loans because of their weak credit history can apply for pay day or cash loans without any hesitation. These individuals are offered bad credit loans against an additional fee.

Benefits of cash advance loans

Pay day loans applicants who are vigilant when borrowing money from the pay day institutes can benefit in more than one way from these loans.

1. No obligation of visiting the premises of the lending institute

Since the application forms for prepayments are uploaded on the websites of all reputable pay day loan companies, applicants do not have to visit the offices of these companies and can submit their requests online. Also once notified and approved, the money is transferred directly into the borrower’s account so they can directly withdraw the funds rather than having to collect the money from the company.

2. No collateral required

The applicants of pay day loans are not required to provide collateral to these companies as their employment proof is the only collateral the cash loans companies seek.

Applying for a cash loan is usually pretty easy. You can apply for a cash loan at many different institutions and they can get you just enough cash to make it through the month or a little further.

Need a Personal Loan

You may need a personal loan for almost anything. You could be going on vacation, remodeling your home or just simply need some extra cash to consolidate bills. When applying for a personal loan you will be faced with a decision of rather you want a secured loan or an unsecured loan.

A personal loan will help you get the cash you need quickly. A personal loan will leave you with options such as how much money you want to borrow and how much time you want to pay back the money. These options will affect what your monthly payment is and will affect what the over-all interest will be, so make sure you know all terms and conditions.

Unlike other loans, a personal loan gives you freedom in how you spend your money. The bank has no say about how you spend your money, but these freedoms do make it harder to get a personal loan.

Payday Loan

A payday loan is a loan is a cash advance only until your next pay check. This loan is very useful if you need just enough money to get through the week until payday and the cash is usually in your hands in just a couple of minutes.

There are institutions that will pay usually around R500 and then could increase to R1,000 after a matter of time.

Much like a personal loan, there are secured and unsecured options. Although the majority of institutions will not require you to own a home, you could have other property you could put up for security. Also most banks do not offer a payday loan so beware you do not get scammed as the internet is filled with offers that are not real.

Most likely you will have to have a bank account and proven employment to get a cash advance. If you can produce proof of both employment and a bank account, you should have no problem getting a loan. In some rare cases a cash advance institution might do a credit background check on you.

If you decide you are going to take out a payday loan you should know that it can be very risky playing this game if you don’t intend to pay it right back when you get your pay check. The reason is if you default on any payments you will be looking at a 20% increase on interest and that interest will just increase more and more and could get you in a considerable amount of debt. If you know you can’t pay it back, you’re better off not taking out a cash advance.

Things to Consider

Cash loans can be a very convenient option depending on your situation. If you need cash fast and you don’t have a credit card or anybody you can borrow from, this can be a good option for you. Maybe you just want the leisure of having extra cash in case you need it. It is up to you.

Personal loans can offer you small to medium amounts of money with a flexible way of paying back the money you borrowed while improving your credit score. Interest rates will vary but will be a lot better than cash advance or payday interest rates.

Payday loans are good for you if you are in a bind and need money fast and can pay that money back sooner than later. A payday loan offers you a quick and hassle free way to put money in your pocket to get though the day, the week and if needed the month. The interest rates are a lot higher so the sooner you pay them back the better.

Consumers and governmental officials alike in Canada need to address the question as to whether cash advance and payday loan in Canada services need to be regulated by respective provinces. Moreover, if quick cash loan and fast payday loan providers are regulated in Canada, what the possible affect on the consumer would be. Provinces within Canada were granted the ability by the Federal government in 2007 to regulate payday loan and cash advance providers in their respective provinces. According to Statistics Canada, there are approximately 1,400 fast payday loan and cash advance providers in Canada. In Ontario alone there are approximately 700 quick payday loan storefront offering prospective borrowers in Ontario these short-term cash advance services.

Payday Loans in Manitoba

In November 2006, Manitoba entrenched quick cash loan regulations, also called payday loans and cash advanced, into law. According to the Manitoba payday loan and Manitoba cash advance regulation, a quick cash loan provider can charge a maximum of 17% on loans up to $500. Additionally, Manitoba payday loan cash advance regulations also require that quick cash loan operations in the province also be licensed and bonded. This is in place to ensure that the fast payday loan providers operating in the province follow the regulations and to also ensure that they are credible. Once a instant payday loan has been processed the customer now has 48-hours to cancel their pay day loan, whereas before the borrower could not cancel.

Payday Loans in Nova Scotia

Furthermore, after Manitoba enacted its payday loan legislation in 2006, Nova Scotia adopted their own set of payday loan regulations. In August 2008, the provincial government enacted Nova Scotia payday loan legislation. According to the legislation, physical quick cash loan locations must not charge a prospective payday loan cash advance borrower more than $31 per $100 borrowed. Furthermore, the faxless payday loan and faxless cash advance provider must also be transparent, whereby the payday loan operation will provide full disclosure to the Utility and Review Board.

Just by examining the payday loan cash advance regulations in both Manitoba and Nova Scotia, a trend begins to emerge. Although the crux of the quick cash loan legislation in these two provinces is the similar, the maximum amount of fees a fast payday loan provider can charge varies from province to province. Essentially, one can surmise from this, that there is no general consensus among provinces pertaining to the maximum amount an instant payday loan provider can charge on a short-term cash advance.

Prohibiting Quick Cash Loan Providers Will Have Disastrous Consequences

Undoubtedly, there needs to be payday loan legislation in Canada to ensure that the pay day loan operations that are unethical (these are the people that have given the payday loan industry a bad name) are not able to operate. However, to ban payday loans from operating in Canada or to cap the amount a payday loan provider can charge very low would force payday advance loan operations to close, which would be disastrous to the consumer.

Bounced Cheque Fees are More Costly Then Pay Day Loans

The Canadian payday loan industry has watched a handful of States in the US prohibit cash advance and quick cash loan providers from operating within their jurisdiction. As we have seen in the US, if payday loans in Canada did not exist, potential borrowers would be in a dire state. For instance, in each state where payday loans have been prohibited in the US, foreclosures have risen, meaning that people had to leave their homes because they did not have enough money to pay their bills. A pay day loan could have gotten them the cash loan they needed to pay their bills. Moreover, there has been a dramatic increase in the amount of bounced cheques, which ironically cost the individual more in NSF fees from the bank then it would to receive a payday advance loan.

It is clear that the continued presence of Canadian cash advance providers is very important, but at the same time, regulation of the pay day loan industry is not necessarily a bad thing as long as the regulations are fair to both the consumer and the Canadian payday loan cash advance industry.