Payday loans, which are also known as paycheck advances, have become increasingly prevalent in recent years. There are a growing number of men and women who find themselves with so many bills to deal with or an emergency situation that they have to have some source for immediate cash. The mechanics of payday loans are simple. Payday loans are extended by credit companies as cash advances and are paid back by the borrower when the next paycheck is received. Most payday advances have two week terms and are for amounts between $100 to $1500. Recently, federal legislation was enacted to cap the interest rates on these type of loans below 40% APR.
There are credit companies that offer what are known as fast cash no credit check loans. These loans give people who have bad credit the chance to get the emergency financing that they need. The danger lies in the fact that some of these lenders are unscrupulous and will charge high interest rates and other fees that will further burden the borrower. Quite a few people find themselves trapped in a vicious cycle of debt when it comes to fast cash no credit check loans. Some people are forced to continuously extend and add to their fast cash no credit check loan, putting themselves further in debt all of the time.
The upside for the payday loan industry is that with an growing number of fast cash no credit check loans being taken out by borrowers, profits are increasing. Research has demonstrated that most of the profit comes from repeat borrowers who keep paying additional fees every time they renew their loans. On the other hand, those borrowers who are prudent can still take advantage of these fast cash no credit check loans when they are in an emergency situation. The key is using these loans only for emergency purposes and paying them back right away.