Most banking industries nowadays are offering a new method on circulating its capital. Known as cash advance or non guaranteed loan, the banks claim that this procedure can help people on satisfying their needs, while in other hand banks can obtain profit from the money circulated. The procedure on having such loans is actually not difficult. First, we need to fill up some forms. Then the officer in charge will immediately check on our credit rating. If approved, the loan will be directly transferred to our bank account. The borrower only needs to pay monthly installment for one or two year period. Payday Loans ABC in the US can give instant approval within 24 hours for up to US$ 1,500 of cash advance.

What is the plus and minus of this method? The big plus is it shortens the length of procedure. We can get approval in 1 or 2 days, instead of applying standard credit which requires due diligence about the business itself. The minus however, that the interest will be abundant, since of course they are giving loan for all people, including somebody with high risk. In return, banks are giving high rate of interest, rounding around 17 to 20 percent per year in Indonesia.

In my opinion, such instant way is only effective for those who actually have money, but don’t have that money at immediate time. They can pay them up for longer period. If we actually don’t sure about the ability on paying such amount of installment, it is safer if we achieve the money required by saving or investing.