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What is a cash advance loan? A cash advance loan is also known as a pay day loan. This is a type of loan with which takes care of financial emergencies of a person for a very short period of time or to be more specific, until the next pay day of the person. The amount of loan sanctioned is also very small. This kind of loan are taken by a person when he or she has to pay an emergency bill, otherwise a hefty fine may be involved. This kind of loan does not need any credit check and so, it is easier to get at a very short time. Only thing required for taking the loan is giving an advanced check with the loan repayment date. This kind of loan can be for 1 or 2 weeks depending on the next pay day of the person.
People should use cash advance loans only for supporting emergency needs and not for some lavish wants. These loans come at a very high rate of interest. If the person concerned uses the money without proper planning to recover the loan then, the fine charged is far greater than the interest charged. The person is surely going to fall into an unmanageable financial crisis. The popularity of cash advance loans in the Philippines is on the rise with each passing day.
If a person uses this loan carefully and for a genuine need, then this loan can be a great boon. For people that believe in taking such loans without any proper or valid reason, this loan can be a life taker. Cash advance loans have both pros and cons.
Pros:
• This kind of loan has a very minimal documentation procedure. This loan will get sanctioned if the person has a permanent job and has no record of defaulting in case of such loans previously. The person also just has to provide a post-dated cheque for repayment while taking the loan.
• The sanctioning of the loan takes just a few hours. This is important for a person already under stress to repay some important bills.
• This loan is given out on the basis of the monthly income of the person. So, it is easy to repay the loan as soon as the person gets the salary. There is a very minimum chance of defaulting unless it is intentional.
• This kind of loan does not have the permission of policing. A person can use this loan for any purpose he or she deems fit. Although there is no policy, this kind of loan should be used for unavoidable and emergency payment purposes only.
• Although the rate of interest for such loans are higher than other kind of loans but different countries have laws regarding the maximum amount of interest rate that a financial institution can charge. Cash advance loans in the Philippines also have a capping on the interest rate charged.
• No collateral security is required in case of getting cash advance loans. This is a great benefit for the person wanting the loan.
• This kind of loan is easily available online. Also, many financial institutions remain open beyond banking hours for the assistance of those that are seeking such loans.
Cons:
• This is a very short term solution for any financial problem. Such loans should only be availed under emergencies as the interest charged is high and also, the associated fees are real heartbreakers.
• The fines associated with default in case of repayment is massive and can break the financial backbone of any person within a short span of time.
• Various financial institutions has variety of rules associated with such loans. It is important to look into those rules and make the right choice.
The above points makes it absolutely clear that cash advance loans should only be taken in case of emergency and not for buying anything extravagant. Cash advance loans in the Philippines as well as in several other countries have become a part and parcel of life. There is no issue with people that pay the loans in a timely manner, but for those that cannot do it have to pay a hefty fine.
