JACKSONVILLE, Fla., Aug. 12, 2013 /PRNewswire-iReach/ -- Years ago, direct deposit loan matching websites, such as Cashadvanceusa.net started a short-term lending trend that has now become commonplace even among larger national and regional banks. Wells Fargo, U.S.Bank and Regions Financial are now offering short-term cash advances or direct deposit loans to their account holders. This appears to be an indication that what was once thought of as a controversial form of short-term financing is now gaining popularity among consumers and acceptance among traditional banks.
The popularity of this financial vehicle, similar to so-called payday loans, seems to be connected to an increased number of account holders direct depositing their paychecks. A study in 2010 by NACHA — The Electronic Payments Association revealed that only 27 percent of employees were receiving paper paychecks. The other 73 percent were having their paychecks direct deposited.
A direct deposit loan basically works like this. A bank or lender offers a cash advance against your direct deposited paycheck. Typically the entire amount advanced is automatically withdrawn when your following paycheck is deposited or a partial amount is withdrawn through a series of smaller installments over the course of your next few direct deposits until the cash advance is paid back in full along with any additional fees or interest.
In a Bankrate.com article, all the bank spokespersons echoed the benefits of direct deposit loans. Richele Messick Wells Fargo spokesperson explained how this product was necessary to help customers through an emergency situation. Teri Charest, spokesperson for U.S. banks said the product was created for "unexpected, short-term borrowing needs." And Evelyn Mitchell of Regions noted that the product is intended to help Regions customers every once in awhile with urgent credit needs.
A Cashadvanceusa.net spokesperson described the direct deposit loan as a "temporary solution but one that is necessary at times." He pointed to the home page of the company's website where their process is explained clearly. "We call them the ABCs of a cash advance: A or Approval has to do with our commitment to get borrowers approved quickly for a loan that fits their situation, B or buying time describes how borrowers should view these loans as bubble gum on a leaky pipe not a permanent solution." But he noted that used wisely the loans can minimize or save borrowers from further financial damage. "Our belief is borrowers do not have to be hindered by a bad credit score. In fact, they can actually improve their score by paying the loan back according to the terms and using an installment payment." He concluded, "Is a cash advance a perfect solution? No. Is it a good solution for someone in a bad situation that needs quick cash to prevent further financial damage? Yes. And that's what bothers me most about the critics. They point out the negatives, but never the positives."
I guess in the end, what will silence the critics and drive the demand for and success of these products is customer satisfaction and positive feedback.
Visit www.cashadvanceusa.net for more information.
Media Contact: Mark Miller, Cash Advance USA Ltd, (512) 571-3828, firstname.lastname@example.org
News distributed by PR Newswire iReach: https://ireach.prnewswire.com