Payday Advance Online – Cash Delivered The Same Day – Bad Credit

Henry Githinji

Henry plans to be an entrepreneur with his own financial consultancy firm, specializing in in binary options and stock trading. Henry is a day trader and plans to use the capital he makes to launch his business. He plans to build a portfolio that attracts investors through his trading performance.
Henry Githinji

What is Payday Cash Advance and how does it work?

Have you ever heard of a payday cash advance?  A cash advance is a short-term loan where an individual borrows a small amount of money, $500-$1,000, often with a very high-interest rate. The borrower makes a straightforward application for the amount he’d like to borrow. Because the interest rate is very high the borrower and lender then come to an agreement as to when the loan will be repaid which is usually between the dates that the money is borrowed and the borrower’s next payday.

Not all payday advances are structured the same way.  Some lenders will require the borrower to repay the advance in a lump-sum while other lenders may allow installment payments over a period of time.  The structure of payday advance can vary by country also.  For example, in America, each state has varying laws and policies while some states ban the practice altogether.

Approvals for payday advance usually depend on the status of the borrower’s financial records such as bank statements and pay stubs as well as the payment history of previous payday advance. As with repayment terms, interest rates will often vary as well.  In some cases, the interest rate may be very high and in others, it may be fair.

Some jurisdictions put a cap on the annual percentage rate that lenders may charge to bring it within the bounds they feel affordable.   In the United States, these rates are restricted by the Uniform Small Loan Law.

Why Obtain a Cash Advance?

Despite the many caveats and challenges that come with payday advances, sometimes they are helpful.  Payday advance can be used as a way to avoid the discomfort of borrowing money from friends or family, they are best used only in the very short-term (less than one month), are readily available, and are a very helpful resource for an unexpected expense so long as the loan repayment can easily be covered from the borrowers subsequent paycheck.

Paying off family members quickly can sometimes be more challenging than a cash advance simply because it’s much easier to delay payments to relatives than a lender who is applying a high-interest rate.

Furthermore, these advances usually have clear terms when it comes to borrowing.  A traditional loan can contain dozens of pages of fine print whereas payday advances are usually forthcoming and free of secret or hidden charges.  Research suggests that a lot of people are drawn to payday advance out of desperation while others are drawn in by the ability to repay the advance through recurring payments.

Requirements for borrowing

First and foremost, the potential borrower must have an active and valid checking account with a bank.   Secondly, the potential borrower must have proof of income such as a check stub to prove that he has the ability to repay the advance. Thirdly, the potential borrower must be at least 18 years old and have a valid photo identification document.

Once the lender has verified the information that the potential borrower has provided he will determine the amount of the loan in which the borrower is eligible in conjunction with the institution’s lending policies.

The borrower sometimes then writes a postdated check to the lender in the amount of the advance and interest fees and sometimes he authorizes the payday lender to take the funds directly from his bank account.  The time frame for the process can vary depending on how prepared and organized the borrower is when he enters the lending institution.

The borrower needs to remain aware that when obtaining such loans the interest rates are often very high and should limit himself to the number of payday advance he takes out.  In America, in the states that have not banned the practice, states often regulate the number of payday advances a borrower can have due to the high-interest rates attached to the loans.

Characteristics of Payday Advances

Although the terms of payday advances vary by lending institution they do share some similar characteristics:

  • Most advances have a maximum amount of around $1,500
  • Most are due on a borrower’s payday but some can be paid back in installments.
  • Borrowers are only permitted to borrow what they can pay back in a single payday. Lenders will often require evidence of a borrower’s earnings.
  • Borrowers must give lenders access to their checking accounts to ensure repayment of the advance on the next payday.
  • Borrowers incur a fee when borrowing a payday loan that the lender holds while waiting for the advance to be repaid on the next payday.
  • These loans usually have a MONTHLY interest rate of about 12% to 30% and hence should be repaid immediately.

What to look for when taking such a loan

It is essential that the borrower first assesses his finances to determine if he is capable of paying back such a loan rather than stretching his limits too far and ending up unable to repay it. Secondly, the borrower must ask himself if taking out the loan is going to solve a problem or create a new one.  Payday advances are designed to assist the borrower in getting over small obstacles not to add to or create more debt.

If a borrower is able to manage his finances until his next payday while paying his bills he should try to do so.  Advances incur interest and it’s always better to be able to manage without them.  Payday advances should be a last resort because they have a higher interest rate than any other type of loan and can be considered another debt.

It’s important not to pile new debts on top of old. A cash advance can add to the amount of money a person owes others and eventually harm in his credit status.  It’s important to clear all debts by paying them as paydays come in whenever possible. Although extenuating circumstances may make it impossible to meet the deadline and require a borrower to extend his loan it’s important for the borrower to make an effort to try to eliminate the debt. After a while, the borrower will be able to clear all loans and start to save.


Payday advances offer some advantages that make people prefer them over other loans which include:

  • Ease of access- The borrower may have access to money fifteen minutes or less after filling out the form. Online it could take less than five minutes for the cash to be transferred to the borrower’s bank account via credit or debit card.
  • Quick approval- Unlike other loans which require a security deposit before approval, payday advances do not require any collateral. Therefore, this makes these loans faster to access.
  • They are termed as a quick cash- Payday advances can be accessed quicker than other loans and they are usually heavily advertised in common places such as billboards, newspapers, and on the internet.
  • Payday lenders usually deal with a huge number of borrowers and allow those borrowers privacy. They typically will not ask a borrower what his plans are for the money as banks do.
  • Less paperwork- Many bank loans require the borrower to disclose a lot of details when borrowing and therefore requires a lot of forms to be filled out. However, this is not the case when it comes to payday advances because they usually have less paperwork saving the borrower a lot of time and trouble.
  • Instant cash – Once the borrower completes all of the required forms, he is either given cash or money, immediately transferred to his bank account or debit/credit card. Banks can take days to process the request and the borrower may still be denied the loan for any number of reasons.


Although payday advances have their advantages they also have a lot of disadvantages that include:

  • Payday advances may not be a solution in the long-run- Payday advances are the same as traditional loans in that they increase the amount of debt a person owes rather than easing a burden.
  • Contracts favor the lenders-Lenders know that borrowers are in need of the money so contracts are written to line the lender’s pockets at the expense of the borrowers.
  • High-interest rates- Payday advances always have much higher interest rates than traditional loans. In the past payday, advance interest rates were so high that the government created an institution to govern them and ease the burden for the borrowers. In previous years some payday cash lenders charged an interest rate exceeding 1000% per year.
  • Harassment – Since there is no collateral involved lenders use other means to get their money back which can leave the borrower feeling as if he is being harassed. It is not uncommon for them to call the borrower’s close associates such as his family and employers to attempt to collect on the debt.
  • Fees charged- When borrowing on a cash loan the borrower may be expected to pay upfront fees as an assurance that the payday loan will be repaid before the next payday. These fees can be very high and based on the amount that is being borrowed. For example, if a person borrows $500 he may be required to pay $100 up front and then pay at the $500 later.
  • Some form of insecurity- Lenders are able to access the borrower’s bank accounts because the borrower pre-authorizes them to collect the money owed directly from his account when the payment is due. Therefore, lenders are not required to consult the borrower prior to making the withdrawal from his account and can do so on or any time after the agreed upon date that was established when the borrower agreed to the proposed lending contract.

Tips when using payday advances

Since payday advances have very high-interest rates it is advisable that borrowers avoid multiple lenders. This practice could lead to higher interest rates and make it difficult for the borrower to repay the loan in an appropriate amount of time. Furthermore, obtaining more than one loan at a time is an illegal practice because it’s against the law to have more than one salary advance on a single salary and/or a single account.  Finally, it’s important that a borrower pays close attention to every detail in the contract and not sign anything that he does not understand because the contract can be used in a court of law if the borrower fails to pay the advance.


Despite the fact that there are a lot of benefits that come with payday advances there are also a lot of consequences.  There may be times that it’s impossible for someone to avoid advance due to an unexpected expense but with the high-interest rate, it could make it difficult to repay the loan as well.  The bottom line is this, a borrower should always ask himself “is this advance really going to help me or is it going to simply increase my existing debt?”

Author: Henry Githinji

Henry plans to be an entrepreneur with his own financial consultancy firm, specializing in in binary options and stock trading. Henry is a day trader and plans to use the capital he makes to launch his business. He plans to build a portfolio that attracts investors through his trading performance.

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