Payday Advance - Get a cash advance on your salary

When a financial crisis rears its head, many look to a payday advance

It may happen occasionally that you urgently require a relatively small amount of money but you do not have the cash right now and can't access your savings. Even though you are due a salary cheque soon your need for cash is may be urgent and going through the normal routine of applying for an overdraft or credit card will take too long.

Whatever the reason, a payday advance can meet your urgent requirements. Applying is usually a quick and effortless task and the best lenders will deposit your money into your bank account instantaneously. This is the biggest advantage of a payday advance - you get the amount you borrow immediately. Other short term loans such as credit cards or current account overdrafts require you to go through a complex application process and to submit to a full credit check, both of which take a period of time.

How does a Payday Advance Work?

The way in which a payday advance works is that you ask a lender to pay you a certain proportion of your salary in advance: the period of the loan is the period between when the money is paid into your bank account and when your salary is paid, in other words less than a month. The lender will expect you to pay back the amount on the exact date you agreed to otherwise you are liable to pay a heavy penalty.

The good news about a payday advance is that you can deal with a reputable company and that you are not exposed to unscrupulous one-man lenders or pawnbrokers who may value your precious assets at far below their real value. Lenders that provide a payday advance have to adhere to the provisions of the Consumer Credit Act and you should confirm whether the lender has a valid license number.

A payday advance is, however, an expensive way to borrow if you use it for the wrong reasons. If you need cash for an expense straight away and that you really can't wait until your next salary payment, a payday advance may be ideal. The important consideration is that you do not make use of such an advance regularly and that you most definitely do not use it to pay back money owed on other loans.

What makes a payday advance a relatively expensive way to borrow in the longer term is the fact that the lender takes on a high degree of risk when the cash is handed over to you. Usually a lender will go through a rigorous process to determine whether you will be able to pay back the amount you borrow on time, which includes a detailed credit check and long forms to fill out. A payday advance on the other hand is granted very easily and because of this the lender needs to take a higher margin in case the borrower does not pay back the amount borrowed.

As much as a payday advance may be frowned upon by traditional lenders it is still a great way to help you out of a tight spot and is not unreasonably expensive as long as you make use of a payday advance only when you really need it.