Cash Advance and Payday Loans in Cleveland, OH
Cash advances, commonly known as payday loans, are short-term, unsecured loans offered by private lending companies. Payday loans can range from $100 to $1,000 depending on state regulations. They tend to be short in term, small in amount, and high in interest. They are best suited for situations when consumers need less than $1,000 to tide them over until their next paycheck.
While responsible repayment may ensure the temporary financial relief does not lead to dire consequences, potential Cleveland borrowers should be aware of the steep fees and rollover charges that can come with payday loans. Annual percentage rates can be as high as 400% for a two-week loan, in some cases. And according to a 2016 report from the Center for Responsible Lending, payday interest rates in some states can cost as much as 662%, while the average APR for credit cards is 17.55%.
Additionally, borrowers who cannot repay previous loans may often have to take out another short-term loan to pay for prior obligations, when permitted. This cycle may trap borrowers in debt. The CFPB reports that more than 80% of payday loans roll over, while 70% of borrowers were using their loans on recurring expenses rather than short-term emergency cash needs. Consumers must assess their financial situation to determine if a cash advance is the best course of action.
Residents can consider cutting down their expenses to generate more disposable income and save money, reducing the need for a loan or making it easier to repay debt. Some common strategies to save money include:
- Planning meals more effectively to reduce waste and spending at restaurants
- Opting for a staycation to take advantage of local Cleveland resources
- Brown-bagging lunch to minimize expenses
- Buying second-hand items
- Borrowing books and videos from the local library
- Canceling duplicate or underused services, such as landline phones, entertainment service subscriptions, or gym memberships
- Entertaining guests at home
Advantages of Taking Out a Payday Loan in Cleveland
In today's economy, more and more Americans are unable to afford unforeseen cash needs. Four out of 10 U.S. adults are unable to pay for an unexpected $400 expense, according to a 2019 Federal Reserve report. Payday loans can help Cleveland, OH, residents who are unable to make ends meet between paychecks.
Payday loans can help Cleveland residents cover emergency financial needs. Short-term cash advances are sometimes also used for:
Medical expenses, including insurance co-pays and money for prescription drugs and over-the-counter medications
- Vacation expenses
- Home improvements
- Personal expenses
- Business opportunities
- Child-related expenses
- Educational costs
- Living expenses between paychecks
There are many reasons people take out payday loans as opposed to other types of loans. A significant advantage of payday loans is that they are often more readily available to those with bad credit than bank loans.
Before taking out a loan, it is essential to consider all of your options carefully. Be sure that you can repay the cost of a payday loan with interest on time to avoid debt traps.
How to Get a Cash Advance and Payday Loan in Cleveland
Cleveland residents who are 18 years or older can apply for a payday loan at a storefront lender, over the phone, or through an online form. The application process can take as little as 15 minutes.
Cleveland residents can sometimes improve the chance of approval by increasing their credit score, though pristine credit is usually not a strict requirement. Payday lenders tend to be less selective than traditional financial institutions.
Cash Advance and Payday Loans Requirements
Lenders will often require the following information and materials to apply:
- Federal or state identification with current address
- Employer information
- Bank account information
- Social Security number
Other requirements might be necessary, and requirements vary by lender. Lenders may consider an applicant's credit score and history as well as their debt-to-income ratio to determine their ability to repay a loan. Applicants who have alternative forms of income are also eligible to apply and may need to provide similar requirements to those highlighted above.
Alternative sources of income include but are not limited to:
- Government benefits
- Child support
- Royalties for intellectual property
- Trust fund payments
- Income from investments
Some lenders allow borrowers to write a postdated check for their loan amounts. In such cases, lenders may debit the borrower's bank account for the loan principal plus interest charges or request that borrowers make arrangements to pay off the loan with cash and reclaim the postdated check after.
Costs and Regulations of Cash Advance and Payday Loans in Cleveland, OH
In the State of Ohio, borrowers may not take out a cash advance of more than $1,000, and the interest rate for such loans must not exceed 28% per year. Borrowers have up to a year to pay back the loan in full.
The Short Term Loan Law, adopted by Ohio in 2018, states that monthly maintenance fees cannot exceed 10% of the loan amount, or $30. The law permits a loan origination fee of 2% for loans of $500 or more. This fee cannot be added to loans with interest. Lenders cannot offer loans that come with a $2,500+ charge in interest. Lenders refinancing a loan are prohibited from charging additional maintenance fees.
Borrowers may not have an outstanding loan balance when applying for a loan. In other words, Cleveland residents can only take out one loan at a time. By law, borrowers can cancel a loan contract up to 3 days after signing an agreement.
To avoid financial exploitation, it's vital to do the proper research and be familiar with your state's lending laws and protections. Cleveland residents should understand the rules and regulations associated with payday lending in Ohio.
Installment Loans in Cleveland
Installment loans are another form of short-term borrowing. These loans are repaid in monthly installments as opposed to one lump sum. Installment loans are often offered to consumers borrowing a large amount of money.
Along with payday loans, installment loans are legal in Cleveland. The law does, however, limit how high a monthly payment can be. The amount owed in each monthly installment is based on income. Interest rates are capped at 28%.
Requesting Title Loans in Cleveland
Title loans are another type of short-term loan available to some Cleveland residents. Because title loans are guaranteed with vehicular collateral in the form of a car, truck, or motorcycle, they are a viable option for those with a poor credit history but who own assets. When applying for a title loan, the lender will evaluate your vehicle and offer you a loan amount based on the vehicle’s value.
To qualify for a title loan in Cleveland, you may need to have:
- Proof of residence
- Proof of ownership of a lien-free vehicle, including the hard copy of the vehicle’s title
- A stable source of income
- A government-issued identification card or passport
Requirements vary by lender.
Favorite Cleveland, OH, Cash Advance and Payday Loan Companies
There are nearly 20 payday lender storefront locations in Cleveland. ACE Cash Express, Advance America, and Check ‘n’ Go are all top-rated lenders.
ACE Cash Express has several locations in Cleveland, most of which are accessible by public transportation. In addition to payday lending, ACE offers installment loans, check cashing, and Visa prepaid debit cards.
Advance America also has several locations in Cleveland, in addition to a website where consumers apply for a loan online. Advance America only offers payday loans.
Check’n’Go has a couple of locations in Cleveland, as well as a website that explains their services. You must apply in-store, but you can begin the application online to expedite the process. Like ACE Cash Express and Advance America, Check’n’Go offers payday loans, installment loans, check cashing, and prepaid debit cards.