If you have an unexpected expense, using a cash advance can help put out a financial fire.
Everyone has been there at least once. Despite your best efforts to stay on a budget, something expensive that you weren’t expecting is going to blow your plans. Maybe your roof is starting to leak and you need to call for repairs, or your cat may eat something it shouldn’t and spend the night at a vet’s office outside of opening hours.
Of course, these emergencies happen when you’ve already maxed your credit card, you have no savings, and payday is annoyingly a week or two away.
A cash advance payday loan can act as a stopgap until you get paid. However, before you apply, there are a few things you should know about this loan option.
1. They are an expensive way to borrow money
Payday loans are usually an option for people with poor credit ratings. While other lenders may deny you funds because of your low score, direct lenders can still approve you provided you meet other financial requirements.
But there is a catch. Because of your poor credit rating, your loan will be charged high interest rates so it can be an expensive way to borrow. Some states place limits on these rates, but those who do not allow lenders to charge triple-digit interest rates.
2. They have very short terms
A payday cash advance deserves the name because it is usually due by the next payday. On average, borrowers have two weeks to pay the principal plus fees and interest. These short terms are expensive.
3. They are not your only option
If you are in a bad position, an expensive loan or a short term loan can be useful. But deal with both costly fees and Short transit times can be a challenge for most people who live from paycheck to paycheck.
Fortunately, you can find an alternative to payday loans with poor credit online. The fact is Cash advances consist of many options including installment loans, lines of credit, and an advance from an existing credit card.
Most of these cash advances can also have high interest rates if you take out bad credit loans, but they may have more manageable terms to help you process your repayments. Online loans with monthly payments give you more time to raise the money than payday cash advances.
4. They are best suited for unexpected emergency expenses
As a rule, the payday cash advance is only ideal if you need help with an urgent financial move in an emergency. As with the examples above in this article, you may need help with unexpected repairs or paying veterinary and medical expenses.
This is how far these advances go. If you need help with a large, planned purchase like a car or home, other financial products are available.
Despite this policy, nearly 70 percent of payday borrowers have Use them for regular expensessuch as rent or ancillary costs. If you can’t pay recurring bills without borrowing, contact a free credit counseling program to see how you can get back on your feet.
Borrowing is never an easy decision, but it gets easier when you have all the facts. Taking some time to become an informed borrower – like reading this article to the end – can help you find the best solution for your next financial emergency.