Myth 1: Interest rates are extremely
This is not so. Rates are reasonable percentages for
the short term of the loan.
The problem can happen only if you are not punctual
or regular (if paying in installments) in paying. A
payday loan provided by a reputable payday loan or
cash advance company does not take advantage of
If you allow a small loan to roll over many times not
been responsible in repaying it quickly as
required, you may end up paying more in interest to
keep the loan active.
Myth 2: Your credit will somehow be
This is not true. The only way your credit is
affected one way or another is through
Credit checks can lower your score if you
are not careful. Payday loans require no
credit check. Therefore nobody can meddle
with your credit.
Myth 3: You have to be employed to
secure payday loan
This is not true.
There are many lenders that will loan to
unemployed people, as long as loan applicants
have other means to guarantee repayment of this
short term loan.
Myth 4: Payday Loan is Unregulated
and Has Hidden Fees
Numerous states have strict regulations concerning a
short term payday cash loan. There are regulatory
provisions that have legal consumer guides monitoring
and controlling the maximum/minimum amounts received
through a payday cash loan, as well as the length of time
and interest rates.
The payday cash loan facility is required by law to disclose
any application fees, interest rates and other fees. No
If you find that a local or web-based payday cash loan
institution is not adhering to your state regulations, please
contact your local police department.
Myth 5: Payday advances a cycle of
You should understand that a payday advance is not
meant to be a long term loan. It is not meant to
function as a credit card or bank loan. It is meant to
assist millions of American families with emergency
A payday advance is given only under the agreement
that it will be paid off on the applicant’s next payday.
Regulations have been pushed to allow payday
advances to be rolled over, but not indefinitely. This
will help to keep the payday advance applicant from
being stuck in a long term, high interest rate loan.
Myth 6: Payday Advances Take Advantage
of Poor, Military & Minorities
Payday advances are marketed toward subprime clients without a
distinction in employment or culture. In fact, these loans are marketed
toward those people earning between $25,000 and $50,000 per year.
Payday advances are meant for hard working adults with an immediate
emergency need that cannot be satisfied through bank and union loans.
According to Penn, Schoen & Berland Associates, researchers have found
that only 3.69 percent of military have taken out a payday advance in the
last five years – and only 1.18 percent have an advance outstanding. That
is extremely low. No discrimination against military personnel or anyone.
The fact is that a payday loan is marketed and supported by middle class
customers who have continuous employment, an active checking account
and need emergency funds until their next payday. Payday advances are
not meant for persons who cannot afford to remit payment on the payday
Myth 7: Quick Payday Loans are Predatory
Payday loans fill a necessary component in the
economic world. Due to credit card debt, it often
becomes impossible for middle class people to
receive emergency quick cash for
emergencies, medical expenses or other needs that
may arise between payday.
Furthermore, since quick payday loans are only
short term cash advances that are not based on
your credit, this adds an additional service to the
middle class person.
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