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If you are a week or two away from payday and need cash urgently, then a cash advance might be the answer. Payday loans are short-term loans that give you the money you need till you get, in which time you need to pay the money back. Payday loans are also known as money advance loans or cheque loans. This guide will help you to decide if payday loans are right for you if you are in need of cash before payday.
Exactly how much can I borrow?
Because the loan is for the short term and you will get it quickly, the amount of money that one could borrow is often quite low. Somewhere between ?50 and ?400 is the usual amount. The way you get a loan is that you write an individual cheque for a certain amount of money plus the fees, and then the lender will give you those funds in cash. If your situation is way better the lender will cash it in, the lending company will hold the check until your next payday, and then. You can pay more fees to keep the cheque held for a few more weeks when you still cannot pay.
Exactly what are the advantages and disadvantages?
The advantages of payday cash loans is that you can get hold of urgently needed money very quickly, which can get you out of a tight finances. The loans are also useful for people who have a low credit score and so find it hard to get other sorts of loans or credit cards. If you know you are able to pay back the exact amount in a few weeks when you get paid, the loans are good.
The most significant disadvantage of pay day loans is that the fees are very high. Normally you will have to pay around 10% or a lot of cost of whatever you borrow. So, borrowing ?100 will probably cost you ?110. Alternatively, even more if you keep extending the borrowing time. You can also end up in a vicious cycle where monthly you use up all your money too early because of having to pay the original loan back. Payday loans should be used as a last option, or when you know that this month is an exceptional month and you will definitely be back in line afterwards.
What are the alternatives?
There are a number of alternatives to payday loans, especially if you have good credit. You could use credit cards to pay for what you need and then pay this amount off at the next payday. When you know you need over a few weeks to repay the amount this interest is cheaper than a cash advance, although charge cards have fairly high interest rates. A personal loan might be a better option, as long as you is able to afford the repayments, if you need more long-term assistance with debts or lack of money. If you have a bad credit score, then a payday advance is often the best option because there is no credit check. The only information that needs to be verified is your current employer.
You should consider payday loans as being an option to help relieve your short-term financial pressures if you are struggling for money prior to reach the end of the month. You should make sure that you just only borrow as much as you can afford to pay back the following month whilst still having enough to make it to the next payday, however.