Hey! Welcome back to our money blog.
In this day and age, financial tools are widely available for everyday people. When real life problems arise, people need real life solutions. Sometimes that means a few dollars and other times larger amounts are necessary. Here we're gonna break down the differences between cash advance apps and payday loans.
The Application:
The first big difference is the application process. In most cases, cash advance apps don't require a credit check. They may ask you to link your bank account instead and review that information in order to determine elegibility. The other option, payday loans may use credit checks. Usually their elegibility requirements are stricter and they may want to see multiple months of income.
The Advance:
When it comes time to recieve the funds, these two options are usually pretty different. Cash advance apps usually send lower $ cash amounts. They don't normally charge interest and they are capped at certain fees. Where as payday loans come with interest. Variable rates are very normal. Anywhere from 30% to 400% are common. Often times the rates depend on the state law. When receiving a payday loan, people can expect larger amounts than with cash advance apps.
The Repayment:
Now the fun part. Repaying the amount you borrowed. In most cases, both apps and payday loans are able to process online payments. They might require you to pick a repayment date. The best time to choose is the day of or the day after you recieve your paycheck. Sometimes repaying on the date you orginially chose is not an option. In this case, reaching out to the company and establishing a new payment date is the best descision you can make. It can prevent additional interest and fees while keeping you in good standing with the company you're doing business with.