The cash advances are offered in the form of easy money loan to those who are in need of funds for expenses that cannot be postponed until they get their next paycheck. These are otherwise known as payday loans and are the loans with the shortest term. The borrowers do not need to submit collateral to get the loans. Bad credit history does not affect the approval of the personal loans for people with bad credit. The lenders need the borrowers to issue the postdated check as the guarantee for the payday loan. Employment proof and the income proof are the deciding factors in payday loans.
Disadvantages of Easy Money Loans
In spite of the benefits, the payday loans are not suggested by the financial experts as there are downsides to these easy money loans. The rate of interest is extremely high in payday loans and could amount to as much as 200% for a month. This feature of the easy money loan is a great burden to the already struggling borrowers. Since the term of the loan is very short, it is quite difficult to make the payment along with the interest on the next payday. Most of his next pay will be spent on the loan and he has to opt for the rollover loan to worsen the financial situation.
The amount due on the loan can be repaid in installments. However, this is possible at the cost of extra interest and very high penalty charges. The hidden charges associated with this easy money loan make it very expensive. Around 15% of the loan amount is charged as the origination fee or service charges for the loan. Many states consider payday loans as illegal due to the overwhelming interest rates. But there are lenders who target the consumers who are in dire need of funds and take advantage of their financial needs. These consumers, in their difficult times overlook the downside of easy money loans.
The borrowers have no other way of raising funds and they end up paying more than the worth of the loan they borrow. The practices involved in the collection of the loans no credit check amount are real humiliation and harassment and the borrowers are stressed further. Some of the easy money loan companies warn the borrowers of prosecution. Some of the borrowers face garnishing of wages. Due to these reasons, the easy money loans are under the government scrutiny. The security risk involved in the online transactions can be considered as one of the major negative points as the borrower’s social security number and the bank account details are disclosed online.
The quick approval and the overlooking of credit record may attract the borrowers in easy money loan, as their needs are satisfied instantly and as these loans can be the only option for them in need of emergency expenses. But finally, these loans end up aggravating the financial crisis of the borrowers. The illegal modes of collection, the extremely high rates of interest and high fees in the form of service charges and other hidden charges are enough to make the financial advisors to warn against these loans. The downside of easy money loan should be considered seriously before opting for it.