What Are Some Reasons To Use Cash Advance Loans
Not every emergency, debt problem, or credit woe is right for a cash advance loan, otherwise known as a payday loan or PDL. Cash advance loans are short term loans that provide people with cash in advance, but require the full balance to be paid back within a couple of weeks, or until next payday. There are some advantages to these types of loans, but there are also some things to consider before getting them to know if it is right for the situation. The following information will go over some of the pros and cons to help people to know when is the right time to use cash advance loans, and when they should avoid using them.
Pros of Cash Advance Payday Loans:
* No credit checking is needed, and the financing terms don’t get reported to the credit companies so these loans don’t show up on credit reports. This is a good thing, but can also be a negative as it helps to be able to get a loan without using credit, but at the same time it doesn’t help a person’s credit either. If a person gets a short-term loan and pays it back on time, it will not improve the person’s credit score or history, but they also do not make any negative marks on a credit score if not paid on time.
* Approval is simple and instant online and a people can get money no more than a bank and account and id. These cash advance loans are guaranteed using a bank account so all a person needs to get a payday loan is a bank account and they can get approved quickly without tons of signatures and checks.
* There is only a one-time fee for the service and no installment payments or interest is charged for these loans. Although they call it APR, these loans don’t have any installment payments, but rather one payment is made and the lender charges a fee for the service. The fee is capped in most states, but check with local laws regarding the fees for cash advance services.
Cons of Cash Advance Payday Loans:
* These loans don’t help improve credit scores or get reported to agencies. This means that these loans don’t help improve credit.
* Short-term loans require the full loan balance to be paid back by the next payday, so unlike bank loans where a person is able to pay back the loan over a long period making small payments, these loans have to be paid back in full within a couple of weeks. This means that it’s necessary to only take what a person can pay back within the give period.
Good Reasons To Use Payday Loans:
* Car repairs – Vehicles break down all the time, and this can be one of the most stressful things in life as people are not sure about repairs, costs, and how they are going to continue getting to and from work. Having so many things to deal with and being short money on top it makes this scenario perfect for cash advance loans. People can get the money they need today to fix their car and get back on track without any worry of being short funds.
* Unexpected Bills – Ever get a traffic ticket, or other last minute expense that is quite large and throws a budget out of sorts. Paying tickets, or other surprise expenses is another good scenario for short term loans. These loans can get the cash needed today to make sure the expense doesn’t escalate more, making it tougher to pay back. Some expenses are very sensitive so making sure they are paid back on time is crucial and could be the right reason to get a short term loan.
* Not Paying Late Fees – Everyone runs into times when they are just plain short cash and not sure how they are going to pay their bills. The problem is many credit companies will charge late fees for bills not paid on time. These late fees can add up and make a whole other expense in themselves. Getting a cash advance loan to avoid paying late fees is also a good reason to use them. Late fees can be as high as $50 for just one bill, and that doesn’t matter what the amount due is and even if the person only owes a $25 bill, if they pay late they will be charged the same high fee. Getting one may be okay, but if a person has to decide between getting dinged by several late fees or paying a cash advance fee, they better choice would be the cash advance fee. The reason is that paying credit late not only charges you money, but reflects negatively on a credit report and can hurt a person’s credit score. Given a scenario of late fees and bad credit score over a cash advance fee, the better choice would be the cash advance loan and save the person’s credit history.
