In this day and age, especially now that the recession has plateau-ed and is still not showing any signs of waning down, most of us feel the crunch every time payday is near because that is when the money we earned from the last payday has nearly run out.
This is true almost everywhere and the United Kingdom is no exception. And a lot of financial institutions have capitalized on this predicament by devising a loan – the payday loan or the free cash advance.
It is tagged as free because the only collateral one needs is the promise to pay when payday comes. In the last couple of years, cash advances have increased dramatically in the United Kingdom alone by a staggering one hundred thirty percent.
However, the loan laws in the United Kingdom does not contain any prohibition on usury, in fact there is a certain financial company that offers an astounding one thousand three hundred fifty five percent (1355%)! The recent steady increase in free cash advances in the United Kingdom is indicative of the financial predicament and on shaky ground stages of individual debts by the English.
The free cash advance procedure starts with the borrower issuing a post-dated check for at least 15 days, the date of the next payday. When the agreed date arrives and the borrower cannot cough up the amount even though he already has the money but is still in need of it, he may opt to pay the original loan and immediately borrow again thereby extending the loan for another two weeks.
This is termed in the loan world as “flipping” or “rolling over”. This is very much prohibited in the United States but no law has been enacted to control this type of loan in the United Kingdom. A survey has been made and the most borrowed amount for cash advances amounts to $500.
A lot of websites in the United Kingdom offer free cash advances at the click of a mouse. All you have to do is sign up and fill in the necessary information.
Most of them profess that they do not employ background checks and the whole process takes only minutes to perform. In some websites, instead of asking you to issue a check, they will request to get your credit card information and charge the said on payday.
This type of loan is very enticing most especially to people in dire need of financial assistance. And people who are in dire need are becoming a growing population. Before you indulge yourself in cash advance schemes, think first. What will you use the cash advance for? Does the situation really call for you applying for cash advance or can it wait until the next payday.