Money management is always tricky business. No matter how well you plan, there are times when problems pop up and you're left with no choice but to borrow. In such cases, do
payday cash advances really help?
The problem:
Most steady income families live from paycheck to paycheck. So, when unexpected emergencies arise, quick cash advances seem to be the way out. But, these loans come with high APR charges, just as in credit card loans. Does that mean that such payday cash advances ultimately compromise long term money management and send middle income families into a downward spiral?
The solution:
It's true that cash advance loans are at the center of a raging controversy. On the one hand, these loans are hailed because they offer timely assistance. On the other hand, critics condemn these loans as damaging because they throw long term financial planning off balance. The fact is, payday cash advances are designed for emergencies like paying the mortgage or avoiding a bounced check. These loans are meant to be utilized only when there are no alternatives and when payment cannot deferred.
Borrowers must think twice before taking cash advance loans. Typically, these loans charge high APR of more than 1000%. That means, a loan of £100 could well attract an interest of £20 or above. Obviously, the interest paid is higher on bigger amounts. Payday cash advances are meant to be short term loans. Typically, the term of these loans is between 14-30 days. In case the borrower is unable to pay off the full amount with interest within the stipulated time, an extension could be sanctioned by the lender. However, interest rates go up. Some lenders also charge additional fee before they grant an extension.
These terms might look difficult from the outside. But it must be remembered that payday loans have a particular purpose and they are meant to be availed only under pressing circumstances. Contrary to popular belief, the loan industry is a well regulated industry. Therefore, they offer a legitimate option when you need money urgently. As a smart borrower, you only need to read the fine print.
Some of the greatest benefits of payday cash advances include:
Immediate Payment: These loans are also called instant cash loans because of the speed with which they are disbursed. Borrowers could receive the money they want within hours of submitting their application. When you need money urgently, this minimal fuss facility could be a life saver.
Credit check: In the recent economic downturn, many people have taken a beating as far as their credit rating is concerned. Cash advance lenders do not check credit ratings. They are only concerned about the monthly check you receive from your employer. So, if you have bad credit rating, this could be the only way you can get some money urgently.
Convenience: Most lenders offer their application forms online. Borrowers only need to fill in the application from the convenience of their home in order to get the check in their savings account. Therefore, payday cash advance is convenient, quick and secure.
As you can see, there are pros and cons to payday cash loans. The outrageous fee charged by lenders is justified by the high volume of risk they undertake. Wise borrowers need to evaluate their options closely before they opt for these loans. That way, they will be able to utilize the usefulness of these loans without falling into a debt trap.
0 comments:
Post a Comment