A payroll advance, otherwise known as an advance on your next pay, is a type of cash advance that is made through a lending company instead of the person’s employer or bank. Usually, this is available for people who need quick money to help them handle their current financial troubles especially when their paychecks are still 1-2 weeks ahead. The lending company will be the one that will provide such help when the employers could not give any cash advances.
According to studies, a lot of people who wish to avail payroll advance loans are those who have low income and have little assets. However, more often than not their financial security prevents them from getting loans with low interest rates. Therefore, they turn to lending companies who offer high-interest rated loans that are short-term.
There are two ways that a borrower can apply for this type of loan.
1 – Via retail lending shops
2 – Via the Internet
Retail lending shops would require a completely filled up application form with attached necessary documents, personal information and post dated checks. The borrower must indicate the amount of loan, the interest and additional charges on the post dated checks. Furthermore, the check should have the specific date agreed upon between the lender and the borrower. Most loans are payable within 10 to 14 days from the date of the approval and additional fees (i.e. bouncing check fee) are charged when the borrower fails to pay the amount on time. Even though there will be extension of the payment, borrowers are encouraged to inform the lending company that they will be late in submitting payments. Usually, lenders will request the payment of the minimum amount before extending the due date.
On the other hand, online application does not require any submission of post dated checks. The only thing required is your current bank account number so that when the due date comes, the amount payable will be directly debited to the borrower’s current bank account.
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