Most businesses that offer cash advances subscribe to a responsible lending philosophy that guides their interactions with borrowers. These guidelines and business practices help the company provide a necessary service in the most efficient and ethical way possible. There are a number of factors that go into the philosophy of responsible lending for cash advances. Here are some of the most common points followed.
Providing A Clear Understanding Of Services Available
In order to issue cash advances in a safe and responsible manner, many companies make providing a clear understanding of the services available a top priority. They strive to provide full disclosure about the financial products they are offering and make sure their advertising is truthful, not misleading. They also follow fair collection practices and believe in consumer responsibility.
No Unnecessary Fees Are Charged
Companies that offer cash advances typically make a pledge to not charge unnecessary fees to the borrowers. The fees that are charged and an explanation of each is prominently displayed where borrowers can easily see them. The fees are also spelled out in the documentation provided to borrowers when they apply for a cash advance. Each fee charged is related to an administrative task associated with providing the cash advance. Different lenders will have different fees associated with their products.
Following State Law Regarding Cash Advances
Many states have passed laws regarding the distribution of cash advances and similar financial products. Ethical cash advance companies follow all the rules that govern cash advances in the states that they operate in. There are some rules that dictate restrictions on who can take out a cash advance and the number of cash advances that can be taken out by a single customer. When seeking a cash advance, be sure to review the terms and conditions of the cash advance to make sure that all applicable state laws are being followed.
Not Targeting Borrowers In Financial Trouble
Companies that supply cash advances to consumers do not target borrowers that are in financial trouble. The products offered by these companies are a short term solution to provide a quick cash infusion to those working individuals that need one. The products are designed to be easier to obtain than a traditional personal loan from a banking institution and can be repaid quickly instead of over a number of months or years.
Consumers need to take responsible borrowing seriously as well. The cash advance distribution process does not require an in-depth financial disclosure in order to hold costs and approval time down for borrowers. Borrowers must ensure that they are not borrowing more than they can afford to repay within the time period specified for the cash advance. If debt problems are a recurring issue, a cash advance is probably not the right choice to make and the consumer should seek assistance from some of the government sponsored debt reduction programs available in their state.
Cash advances can be a good way to get the money that you need for small, urgent financial situations that you do not currently have the funding to take care of. It is important to remember that the cash advance and the associated fees must be repaid within a short period of time, typically with the person’s next paycheck. If this is not financially feasible, then a cash advance is not the answer for the issue you are facing.