Understanding the concept of interest rates and fees gives you a more positive approach to determining the best cash advance loan option that you currently qualify for.
Cash advance loans come with additional interest and fees as a way to reward direct payday lenders for their consistent humanitarian services.
But still, is there any way to get a cash advance loan from a direct payday lender without having to pay any interest or accruing extra costs?
Interest-Free Cash Advance Loan: Do They Exist?
As discussed earlier, interest is necessary for a cash advance loan program as a way to compensate lenders for their unquestionable services. But this doesn’t go to say that there aren’t actually effective ways to get the best rates and fees on your instant cash advance loans.
Generally speaking, a direct payday lender would rate your ability to get funding based on the following factors:
- Monthly income size
- Credit utilization ration
- Consistency
All these also make up qualifying factors to help you get funded by a lender at the least possible rates and fees.
You just have to understand the high risk that your direct payday lender is willing to take with you. Usually, a no credit check loan is the last option for funding for anyone after being rejected countless times by the other many lenders and credit unions out there.
And since a direct payday lender will generally not consider your present credit score before agreeing to your loan request, how much price do you think they are willing to take on such kind of risk?
So, yea, the more the risk on a payday offer, the more likely you are to get higher interest rates and fees on that offer.
This is why we often advise individuals to always be tactical when approaching a direct payday lender.
A payday lender may sometimes agree to give you money that’s way above your monthly salary, but because of the high risk involved in such an offer, the rates and fees are definitely going to increase accordingly.
Thus, when asking for money from a payday lender, do make sure that you are not going above the current limit of your regular monthly paycheck as this is guaranteed to cost you more when trying to pay back the loan settlement.
Also, there’s usually a certain amount of money an individual is generally allowed to borrow – this can be seen reflected in their debt-to-credit ratio (credit utilization).
By borrowing money way above your current debt-to-credit ratio, you are definitely going to get an increase in your loan rates and fees.
Understanding how to balance these both (monthly paycheck and credit utilization) plays a very critical role in allowing you lower interest rates and fees when dealing with payday lenders directly.
Finally, being consistent in your loan payments will give you a whole lot of favor with your lender than you’d ever imagine.
This brings in trust between the lender and borrower, which in turn, will make your lender even more sure of the lesser risk involved when doing with you, and can be seen reflected in your loan rates
