Cash Advance Loans
Information You Can Use When You Need a Little Cash
Too much month at the end of your money? You can get a cash advance loan to help tide you over until your next payday, but it won't come cheap. Here's information you can use to help you decide which method you can live with.
A Payday Loan, or Cash Advance, is a short-term loan for a relatively small amount (usually no more than $500) that is intended to get you to your next payday. This can be in the form of a line of credit through a credit card, or through one of the fast-growing Cash Advance stores that are appearing everywhere. The loan is usually given in cash, although sometimes this loan is deposited directly to your checking account. AdvanceAmerica has locations in 34 states. Their web site will assist you in finding a location near you, as well as what you need to apply for the loan. CheckintoCash is another company with stores in 30 states and more locations being added.
The Payday Loan is secured by your post-dated check that includes the original loan amount plus interest or a handling charge. On the pre-arranged day, usually 14 days later, the lender processes your check in normal fashion. Therefore, it's important that the funds to cover your loan and fees be in your checking account on or before the day your post-dated check will be processed.
A cash advance through your credit card does not have a grace period before interest begins accruing. As soon as you have completed the transaction, interest begins. And you'll probably find the interest rate is higher than for a regular credit card purchase. A loan through a Cash Advance store will usually cost you anywhere from $10 to $30 per $100 borrowed. Shop around for the lowest fees and easiest terms you can live with.
These options for extra cash can be a lifesaver if the alternative is a hefty fee on a late payment, or fees paid for bounced checks. But there are some things to watch out for so that you don't end up paying more than you already are:
1. Extra fees over and above the one charged for the loan. Examples are early repayment fees - fees charged if you pay off the loan before it's due, and membership fees -charged for you to join their establishment, in addition to the regular loan fee.
2. Access to directly debit your account, although if you are applying online rather than in person, this may be the only way you can repay the loan.
3. Asking for collateral such as the title to your car
4. Read the fine print so that you don't miss something that could cost you even more.
If you find yourself borrowing against your credit card or visiting a quick-cash store on a regular basis, alarms should be sounding, as this signals something very wrong in your financial life. Sit down with your bills and pay stubs and evaluate your income to debt ratio. If your other debts are eating up your income, it may be time to consider visiting a non-profit credit counseling service. Perhaps you are just simply spending more money than you make. Track your daily expenditures for a couple of weeks to see where you are spending your money, and where you can cut back.
We all have financial emergencies from time to time, but it's important to take control of your spending habits so that the emergencies that may occur can be handled easier, without resorting to expensive borrowing habits. Loans from cash advance stores and advances on your credit card should be used with care and paid off as quickly as possible.