Many consumers are a bit confused about exactly what a cash advance is, and this is really quite easy to understand especially since the term cash advance can refer to more than just a cash advance that is secured using your checking account. Understanding first the two types of cash advances is essential so that you can truly understand the differences so you are aware of what you are applying for. While some consumers have the ability to use both types of cash advances, others do not so knowing the differences can help you determine which is best suited to your needs.
The first type of cash advance is linked to credit cards. This is when a cash loan is obtained against the available credit line that your credit card offers. For example, if you have a credit card that provides a $5,000 credit limit and you have a cash advance limit on the card for $500 you would be permitted to borrow up to $500 from your available credit limit for a cash withdrawal on the card. This is typically accompanied by an increased interest rate that is charged as well as an initial fee such as 5% of the advance amount. You are generally permitted to make small payments on the loan. Overall, this is more expensive than the standard usage of your credit card, but it is an option that is available for many.
The typical manner in which a cash advance is used is when it is secured against your checking account. In this manner, you would go to a cash advance lender and write them a check. The check that you give them is post-dated to a date that is in the future, typically anywhere from 7 days to as much as 30 days depending on the terms of your loan. You would then sign a contract agreeing that you will pick the loan up when it is due, or the lender has the right to deposit the check into your checking account to get their money back.
If you notice that you are unable to afford to pick up the loan when it is initially due you can typically roll your loan over. This would allow you to simply pay the interest that is due on the loan, which will hold it for another loan term. However, it is extremely important to understand if you do decide to simply roll the loan over it can get extremely costly. If you are planning on picking up the loan when it is due you are able to get the best deal possible. Simply rolling over the loan continuously is extremely costly, if you can manage making a small additional payment towards the principal of the loan is a very good idea since it will ultimately lower the amount of money you need to provide at once to pay off the loan.
As you can imagine, the differences between a credit card based cash advance and a typical cash advance are quite large. Deciding which is best for you is a decision that you and you alone must make. If you are looking for just some short-term quick cash then often choosing a credit card based cash advance can be very costly making a traditional cash advance the much more affordable option.…
A lot of people are starting to worry, they have loans with payday loan lenders and their states are starting to talk about closing these lenders down. The sudden financial crisis that many consumers are feeling is a very scary and real situation that is not likely to disappear in the near future. The good news is that there are some truths that can hold true for most people and will allow them to know that their finances are safe, regardless of what their state chooses to do. Simply sitting around and waiting on the states to finally make up their mind is never a good idea, so making some arrangements in advance is always good. Overall, it seems highly unlikely that any state will go so far as to completely ban the payday loan industry. The money that the industry brings in for each state in fees and taxes is enough to make it extremely hard for any state to just shut them down. After all, much as the political powers of any state hate to admit it the state needs money to run, and closing down and entire industry is generally not in the best interest of the citizens of the state. Think about it from the perspective of not only does the state lose the money that was generated in fees and taxes, but now there are even more people out of work in an already shaky financial situation.
Additional considerations are also how the consumers who utilize payday loans would be able to find and locate the additional money that they need in order to actually cover their bills. This is a huge problem that a lot of people are faced with and are completely confused about how to handle. The good news is that there are plenty of online payday loan companies that are available to provide loans. This is a great way to still get the money that you need, without the hassles that often come from trying to track down a payday loan lender after they have been banned in your state. The benefit that most people have is if your finances absolutely cannot handle losing, the payday loan that you currently have you can typically apply for an online payday loan which would still give you the money that you need temporarily until your finances are back on track successfully. While this may not be the perfect solution that everyone is looking for, it does still provide an option that can be used to help ensure that there is money readily available that you can use. For many people this is a benefit that is needed a lot.
For those consumers who simply view the payday loan industry as being an evil force for the poor the disappearance of the payday loan industry could not come fast enough. However, there are still others who feel that it provides more help than harm. Deciding where on the spectrum you really fit is not always easy but the fact remains that if the payday loan industry ever does go out of business there will be a lot of people who are forced to look into new methods to really cover their sudden unexpected expenses and there will be even more people out of work as well, none of which provides a comforting idea to consumers.…
If you talk to most of the consumer finance experts in the world, they are likely to tell you that a Payday Advance is pure evil. They typically claim that consumers who use payday advances are going to be sucked under in debt. While this is generally not true, it can be a very dangerous trap if you are unprepared for how to handle a payday advance. If you are prepared for the loan, you may discover that they are extremely helpful to your financial situation. The more prepared you are for a payday advance the better your experience with the loan will be. However, to be prepared you really need to take some time to do your research. This does not mean that you need to sit around and study dozens of economic books in able to prepare yourself but you do need to look at your personal finances to help you decide if you can afford the loan. This means you need to honestly see if your budget can afford the expense that a payday loan will cause. The biggest consideration is you need to determine if you are able to afford the principal payment itself.
This means that you need to be able to repay the bulk majority of the loan fairly quickly. While the interest rates on the loans are not free, they are typically a very small percentage of the overall total of the loan. This means if you borrow a total of $200 you need to ensure that you can afford to repay somewhere in the neighborhood of $230 to as much as $250 when the loan is due. If you suspect that you might have a problem, repaying the loan then looking to see if you can afford at least the interest payment is essential.
By simply repaying the interest, you are permitted to roll the loan over. This would provide you with more time to actually repay the debt, but at the same time you would still need to repay the debt at some point in the near future. It is extremely important that you spend the time looking at your budget to squeeze in the payday advance payoff as quickly as possible, if you continue to drag out the loan for a very long period of time, it will likely become extremely expensive quite quickly.
The majority of people who have a bad experience with Payday Advances are those consumers that have made the mistake of rolling their loan over so many times that they have paid far more in interest charges than they ever borrowed. This is quite easy to do if you fall into a habit of rolling your loan over. However, responsible lending practices as well as responsible money management will help you to avoid this situation. If you suspect that you will have a great amount of difficulty paying the money back you should generally look into a different option since a payday advance may not be the solution that you need. Borrowing money wisely is extremely important regardless of whether you are seeking a payday advance or a typical loan from a bank. If you take the time to be prepared and repay the money quickly, your payday advance experience can be positive regardless of the opinions of experts around the country.…