It’s three days until payday, but your bank account is already drained. But, there are still groceries, gas, and a few other things to buy. If you’re in a similar financial squeeze, you’re not alone. A recent Bank of America survey reports that over a quarter of U.S. households live paycheck to paycheck, and getting an advance on your paycheck may sound like your best bet. But is it the best option?
We’ll take a look at how a payroll advance works, the requirements involved, and what to look out for before you explore that option. Max CashⓇ Title Loans might be able to offer you an alternative to employee advances to make it until payday–even if you have bad or no credit!5
How Does a Paycheck Advance Work?
A paycheck advance (also referred to as payroll / employee advances) is considered a short-term loan that allows you to tap into your wages before payday. It is repaid out of your next paycheck. You can get an advance either directly through your employer or through online apps, in addition to online direct payday lenders. So, when you find yourself strapped, you may think “to borrow from my paycheck” is your best option… but should you?
What to Be Aware Of
A payroll advance is considered a formal agreement between you and your employer with documentation you’ll have to sign first stating that you agree to promptly repay the advance if issued early, and it will come from your next (or future) paychecks. However, this can cause problems if your next paycheck is less than what you need it to be, which can result in some financial headaches.
What can happen? You ask for another advance, your check will be smaller, and you will borrow again. Repeat, repeat, repeat–it can quickly turn into a vicious cycle, but a title loan could be a more convenient way to make ends meet without slashing your subsequent paychecks in the same manner. Call Max Cash Title Loans at 855-561-5626 to learn more about getting the funding you need when you need it!2 5
How Can I Get My Paycheck in Advance?
There are several options available if you want to borrow from your paycheck before your next payday. Take a closer look at the methods you can explore if you can’t make ends meet this month:
Ask Your Employer for a Payroll Advance
Some employers may offer employee advances, which allow a portion of earned wages to be paid early, particularly in an emergency or other financial hardship. Once an advance is given, the amount will automatically be deducted from the employee’s following paycheck–or paychecks, depending on the loan.
Although there’s typically no interest or credit check required, there still may be requirements to discuss through the HR department, and employers might think that if you’re struggling financially, your work quality on the job might be subpar. It basically creates a bit of an awkward situation for both parties.
Apply For a Payday Loan
If you’d rather avoid asking for an advance from your employer, another option is to consider a payday loan, which is a short-term loan ranging from $100 to $500, providing a solution that may be all you need until your next paycheck. “But, do payday loans go on your credit?” ask many potential borrowers, and the short answer is? Typically, no, but payday lenders may report to major credit bureaus if the loan is defaulted on. Whichever loan you choose to get, it is important to stay on top of your payments as much as possible. If you feel like you’re stuck and you’re searching for a larger loan amount, contact Max Cash Title Loans today to help you get cash fast and give you some financial clarity.2 5
What are the Rules for Employee Advances?
Whether you choose to apply for a payroll advance through your employer or via an app, there are still rules and legal considerations that go along with it that you should be aware of:
- Written Request/Agreement: Most employers will ask that you submit a formal written request for employee advances that covers the repayment terms with your acknowledgement and signature.
- Voluntary Repayment Terms: By federal labor law, the repayment terms in the request must be voluntary and can be made in installments vs. salary offsets.
- Limits on Repayment: With employee advances, many states impose caps on the maximum amount you can request and the frequency you make requests.
Before deciding on submitting an advance on your paycheck, be sure to carefully review your employer’s specific terms so that you won’t be caught off guard when your next check is less than what you usually receive and repayment kicks in. But don’t count on a payroll advance as a reliable fix to your financial problems!
How to Borrow From My Paycheck
“I need to borrow from my paycheck” is circled in red on your calendar, and you’re certain it’s the best route to take. Here are some options to weigh against one another to see how they compare:
Payroll Advance Apps (EarnIn/Dave)
EarnIn and Dave are a few of the more popular apps that let you withdraw a part of your next paycheck. EarnIn allows up to $150 per day, with a max of $750 or more between paydays, while Dave caps out at $500. The convenience factor is how quickly you can qualify (just a few minutes ) and, with Dave, for example, if you don’t meet the $500 requirements, you can try again later if your financial situation changes.
The downside with these kinds of apps is definitely the fees, with “lightning speed” fees running up to $3.99/transfer. Sure, there may be “no interest” to use the app, but there’s the whole tipping concept where you might feel pressured (or obligated) to pay–which can add up, and if you’re going through financial stress as it is, these apps may not be so helpful, no matter how convenient they are.
Employee Advances
Requesting a payroll advance from your employer can be a short-term solution, but not all companies offer this option, and the entire process can sometimes be time-consuming or even awkward. Every workplace is different, with its own policies on how employee advances are distributed and how fast.
Typically, there’s no interest or fees, but it may affect your future wages since the amount will be less, which can cause you to miss bills or fall behind. To get the full picture, contact your employer’s HR department for specific policies and direction on how to fill out the payroll advance agreement. Keep in mind that the advance will also be taxed, and the amount you’re asking for will probably be less.
Payday Loans
Designed for fast cash with a quick application process to match, payday loans are available either online or at storefront locations. Payday loans typically cap out at around $500 on average and are intended to be repaid in full (plus interest) by having the amount electronically withdrawn from your next paycheck. If you’re unable to repay the loan by that payday, you can get slapped with late fees. If you can’t pay the loan back at all, the defaulted amount may go to a collection agency, which can harm your credit.
Title Loans
If a payroll advance or payday loans are looking less and less appealing, title loans may offer the flexibility you’re looking for, since these secured loans cater to those with poor credit who often get rejected by traditional bank loans. Title loans are secured through a qualifying vehicle title, so the application process is comparatively more flexible. The best part is you get to keep driving your vehicle while paying the loan back in a timely manner.5
There’s not a lot of hoop-jumping here; just ensure your vehicle’s title is in your name and is free from any liens. If you’re currently financing your car, it’s still possible to get approved for title loans, and if you’ve declared bankruptcy in the past, it’s still not a dealbreaker. When you need to cover rent, groceries, or other bills and your paycheck won’t cut it, try Max Cash Title Loans to put your mind and finances at ease!
Apply for a Title Loan vs. a Payroll Advance Today!
We’ve covered what you can expect from getting an advance on your paycheck or employee advances, but the bottom line is that it may not be adequate enough to provide the cushion you need, and before you know it, you may have to borrow from your next paycheck again. With title loans, you may be able to secure a larger loan amount based on the equity in your car, to not only handle your current needs, but you can put the rest away in savings.
If you’re ready to see if you qualify today, just follow these easy steps:
- Go online and take a few minutes to fill out this form and answer basic questions about your current finances, all for free at no obligation.5
- You may be asked to send in some standard documents for verification purposes. That may include your valid, government-issued photo ID, proof of residence and income, your lien-free car or truck title, and photos of your car that aren’t blurry.
- After providing the documentation listed above, we will let you know your approval status. If you are fully approved, you can review your contract. If you agree with the repayment terms, just sign it and choose how you’d like to receive your funds!4 5
That’s it! Simple, streamlined, and quick when you don’t have time to waste until your next payday. Max CashⓇ Title Loans is available 24/7 to answer your questions, even after your approval, and can assist you if circumstances in your life change. Call us at 855-561-5626 and you’ll see why we work hard to get you a great deal on a title loan!2 4 5