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Most players in the cash advance industry charge around $20 as fees
per $100 borrowed. There are some who charge far less than this amount
if the borrower is a first-time applicant. They charge as little as
$10 for every $100 borrowed. This comes as a special introductory offer
for first time new customers on their first loan ONLY.
But then, there is a basic condition attached to this offer: the borrower
has to repay the advance within the stipulated date. Once he or she
applies for a renewal, the creditor charges interest as per regular,
non-introductory rates for subsequent loans. As the interest fee is
very low, the advance made is known as a Cheap Payday Advance. Usually
the institutions give an advance of up to $1,000. Low-cost Payday Advances
in general save a lot of time because approval is very fast, usually
within minutes.
How does a Cheap Payday Advance work? Once the application for the
advance is approved, the borrower writes a post-dated check from his
or her checking account for the principal plus the interest fee. For
example, someone named Ellen needs $100 in cash and approaches a creditor
who charges $10 as interest for every $100. She has to write a post-dated
check for $110 to the lender. The lender will get the check cashed,
or withdraw the amount from Ellen’s checking account by depositing
Ellen’s paycheck at her bank, or do an electronic transfer.
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