Fast cash advance loans carry a reputation of being high interest money with a debt trap to keep your payoff an impossibility. For some borrowers, this may ring true especially when the payoff was not planned out at the same time. High interest with any type third party money will become expensive when left out over a period of time.
There are some states which have stepped in and regulated these short-term loans in order to keep their residents’ finances in a safer position from being trapped in the debt cycle. Some states have banned them altogether which carries both opposing and supporting views. Those who support the ban don’t want any more debt problems created from high interest loans. Those who oppose feel that if the loans were available, at least a person would have the option to use the fast cash advance loans or not.
Some banks offer cash advances without having to follow any state regulations. What does this mean to a potential customer? These loans are offered to any participating bank customer, despite regulations.
Banks will only offer these cash advances to bank account customers. There is no need to set up access to the accounts and all the personal information is on file.
Money transfers will happen in a matter of seconds rather than hours. There is no application process, just a few quick clicks.
Money collection is easy since banks have firsthand knowledge of when deposits are made. The money is repaid and the fee collected in one fell swoop.
There is a story from National Public Radio about an elderly lady who used one of these bank loans in order to make some improvements on her home. Being a California resident, a regular cash advance loans lender would only be able to process a loan for $255 based on her monthly income. Since she lives off of Social Security and probably doesn’t make enough to qualify for the ceiling rate, she would have a hard time obtaining a loan from a direct lender.
She didn’t even need to apply for a cash advance loan.
The bank’s cash advance came easy. With just a few clicks, this woman had $500 transferred into her account. When her next Social Security check came in, the bank immediately took their $500 plus a $50 fee and the loan was settled. Perfect right? Well this woman could not afford to go the rest of the month with $550 less to live on, so you guessed it, another loan was processed.
Some people may argue that at least she was dealing with a well-known bank rather than a direct lender. Others will say that the cash advance regulations were set in place for a reason and that the banks and credit unions should follow the same rules.
For some, the money options are there. For others, they will have to decide on whether to use a bank loan, a fast cash advance loan or put a little more effort into controlling the budget while living within their means.
