Payday Advance Services

By: Ken Marlborough

Lending businesses are bound by federal and state government regulations, and work from 9 AM to 6 PM Monday through Friday.

As a first step, the borrower is asked to fill a printed application form available in the lender's office or hosted on the lender's website for downloading. This can be printed, filled in and submitted to the lender, or can be filled in the web page itself and emailed. The form includes details such as the borrower's identity particulars, proof of residence, employment history, checking account details and references. The lending institution reviews the application, notifies the borrower by phone or email regarding the status of the application and transfers the funds the next business day.

At least 2 days before the due date for payment, the lending institution expects the customer to fill in a `payment request' form that notifies the amount that the customer will, repay and by what date.

One question that is of interest to borrowers is: "How much is my repayment amount?" The answer depends on the principal amount borrowed and the frequency of repayment, as agreed to in the payment request form. If the repayment is effected promptly, most credit sources charge around $20 per every $100 borrowed. For example, if the customer borrowed $300 the fees would come to $60 on the repayment day.

Though Payday Advances are short-term loans that are intended to be repaid quickly, Truth-in-Lending laws make it obligatory for lending businesses to disclose in writing all the terms and conditions including the Annual Percentage Rate (APR). APR is a total amount that includes the amount borrowed, the interest, processing fees and any credit check if applicable. It is expressed as a percentage of the advance amount borrowed. On the specified due date, the lending institution arranges the deduction of a certain amount from the borrower's checking account, according to the payment request made by the customer.

Most lending institutions make use of three forms in the process: Payday Advance Application [some lender – creditor offices call this `Customer Information Sheet'], Payment Request [also known as `Cash Advance Requirement', `Requirement Sheet' etc] and `Loan Agreement,' which includes complete details including the amount borrowed, APR, interest accrued, amount to be repaid, and all issues which make the agreement a straightforward document.

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