16
Mar

The Difference Between Payday Advances and Paycheck Cashing

Posted by Sara M. Varese

Payday Advances Vs. Paycheck Cashing

Have you ever wondered what a payday advance was or what paycheck cashing is? Is there a difference? Yes, there is a difference!  One is good for cash when you don’t have it and the other is good for getting cash from a check when you don’t have a checking account.

Question regarding difference between payday advances and paycheck cashing

Payday Advance: A payday advance is getting a cash loan using your future paycheck as collateral.  How it works is that you write a post dated check for your next pay date, made out to the payday advance lender, and in the mean time, the lender will give you cash in the amount of the post dated check, minus a payday advance fee. If you apply online for a Payday Advance, you can get the cash that you need very quickly from the privacy and convenience of your own home, usually in just one business day.

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Paycheck Cashing: Those who do not have bank accounts and need to get their checks cashed will probably want to use the services of a paycheck cashing store if they can’t use the services of the check issuing bank.  For example, let’s say a person who was paid by his or her employer with a paycheck needs to cash the check to obtain the money, however, he or she does not have a bank account. This person would either cash the check at the banking institution that issued the check or at a paycheck cashing store, which is usually more local and easier to get to than a bank for a small fee of about 2 – 4% of the check amount.

The real difference is that a payday advance is getting a money loan now, that you will be repaying later, based on a future check, and a paycheck cashing is cashing a valid check  at a store that would honor it, because you don’t have access to a bank that can do it for you.  Have more questions? Read more about the difference between paycheck cashing services and payday advances here.

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