If you’re looking for a solution to a short-term monetary deficit, a cash advance could be the ideal solution. Normally a two-week loan that allows you to gain access to funds rapidly, until your next pay check comes through, a cash advance can help you out when unforeseen payments arrive at the worst possible time.
Cash advance loans have become a popular option for those in financial straits because of the limited eligibility requirements, the lack of a credit score, the hassle-free online application procedure, and the speed at which funds are made available directly in your bank account.
It’s vital for borrowers to understand that a cash advance is specifically designed to be used as a short-term temporary loan option. They should be used for urgent home maintenance repair costs, emergency medical bills or to help clear late bill payments that are accumulating interest charges. They should never be used for discretionary purchases or payments that can’t wait until your next pay day.
Lenders need to ensure that they are not contributing to a cycle of debt and simply burdening someone with a loan that they will be unable to repay. To help with this, the amount of money available in a payday advance is limited to between $100 to $1000, dependent on confirmation that borrowers have a monthly income of at least $1000 after taxes.
The charges associated with a cash loan may also initially appear to be high, but only when they are viewed over the long term. Remember, these loans are designed as short-term solutions, with most lenders offering a loan period of two weeks, and some able to offer up to 30 days. So although most lenders charge an average of $25 for every $100 borrowed, resulting in an APR of 650 percent, the shorter term over which a cash advance is intended to be utilized means that these charges work out to be less than overdraft fees at your local bank.
If you should fail to adhere to the repayment schedule that you agreed to with your lender, the finance fees can be considerable. In this event it’s important to contact your lender as soon as possible; your lender may allow you to roll over your loan, but, although this can give you a little more time to make your repayments, if you’re not disciplined it can lead to a downward spiral in which you are only paying off finance fees and not making an impact on your loan capital.
Ultimately, when considering an application for an online cash advance, borrowers need to be keenly aware of the potential pitfalls as well as the advantages. If a purchase or payment can wait till next month’s pay check, then a cash advance should not be considered. They can provide a great way of breaking free from the cycle of debt, but borrowers need to be fiscally responsible and disciplined, otherwise a cash advance may just contribute to the problem.