Sara Routhier, Managing Editor of Features and Outreach, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming worl...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: May 24, 2011

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Though payday loans may all be geared to help consumers secure quick cash before pay day, different cash advances have various benefits and disadvantages based both on their terms and on how they’re secured by the borrower. Like other types of loans, payday loans are acquired either through a broker, who acts as a middleman between the lender and the borrower, or from a direct lender, who acts both as the point of contact for the transaction and the source of the funds.

Cheap payday loans may be found by working with direct lender companies due to the lack of a need to pay for the services of a broker. As a tradeoff, this may result in a less convenient experience for the borrower, as any necessary research or information gathering is more likely to be the responsibility of the loan seeker when a broker is not present.

Cash advances, including same-day cash loans, may offer lower APR interest rates when secured through a direct lending company, though the most common rates are above 600 percent, costing borrowers around $25 per $100 loaned. Through taking the time to locate an agreeable direct lender with attractive repayment plans and reasonable fees, borrowers may be able to enjoy lower charges.

Direct lender companies are likely to require documentation similar to information required by brokers, though additional paperwork or proof of income, such as a series of recent paychecks and verified employment history, may be required depending on the lender’s preferences. Direct lenders with strong evidence of a borrower’s ability to pay are prone to offering more relaxed repayment terms and cheaper interest rates.