 Cheap
Cash Advances
Sifting through the various ads from cash advance providers can be
time consuming and frustrating, especially when few companies that claim
to have cheap cash advances will actually disclose the full amount of
their cash advance product to the general public without a great deal
of hassle first. Why do they hide this information? Do cheap cash advances
really exist, or is it just another advertising ploy to lure unsuspecting
consumers into a trap?
Market Pricing Meets Market Demand
One of the basic laws of any economy within America's view of capitalism
is that market price is determined by market demand. Very few companies
- cash advance or not - can afford to undersell the competition and
still turn a profit, especially given the fact that all the variables
in the game are the same (particularly for the cash
advance industry). Generally speaking, the same percentage of customers
will default (fail to pay) their cash
advance loan, just like there's close to the same cost associated
with running the website that sells the online
cash advances, and so on. How then are some companies able to sell
their payday cash advance loans
at such a low price?
More on Brokers vs. Lenders
As mentioned in the article on cash advance lenders, companies that
both sell cash advances and service the cash
advance (collect payment and address customer questions/concerns)
are lenders. Lenders get the full financial benefits of loaning out
the money (usually in the form of interest) whereas brokers usually
only get a finder's fee. Despite the fact that lenders get more money
out of the deal, there are also additional costs associated with lending
out the money. As stated before, call centers are needed to answer customer
questions and there's the danger of customers defaulting on their cash
advance loans, so the costs are substantial. Neither brokers nor
lenders can really afford to give much of a discount with these mounting
costs in place, which is why the thought of a cheap cash advance can
be a little suspicious.
Are They Safe?
Just like every business transaction, the assessment of whether or
not conducting business with a company is safe is entirely up to you.
In cases such as this, it's best to look at how much money you're saving
when you're issued a cheap cash advance. Is it enough to make a difference?
Are the benefits associated with this loan the same as other loans?
If in fact the company that offers the loan chooses to skimp on service,
it's probably a good idea to go with a more trusted provider. Making
any sort of trade-off that could potentially result in decreased service
quality or weakened security practices just isn't worth it - you might
end up with more troubles than you started with!
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