Pros and Cons of Cash Advance Loans
When you want money urgently for an emergency expense, a cash loan can provide a quick solution to getting the funds you need. There are lots of pluses and some downsides to getting a payday loan; however, by looking at the pros and cons you’ll be able to determine if its right for you.
Benefits
The main reason why payday loans are so popular is because they are not difficult to get. Payday loans are extremely easy to be approved. A lot of companies do not perform credit checks as a requirement for funding a loan. In lots of cases, all you need in order to be approved for a loan is to have a job and be a US resident that is 18 years or older. Cash advance loans are short term loans that are usually paid back within 30 days. Most states regulate the amount and interest rates for cash advance loans. The loans start at as little as $100 and can go all the way to $1,500. There are a some states that restrict payday loans, but most states allow you take them out. Another major advantage of payday loans is that they are paid out very quickly. If you go online, you will notice companies that advertise being able to get a funded loan in as quick as 1 hour. The truth is that approval is very fast and many can transfer the money to your bank account by wire same day; however, it should take about 1 day for it to show up in your bank account. Even if you have to wait a day, it’s a lot faster than trying to get a loan at a bank.
Cons
Although payday loans are very accessible to get, the interest rates on them are high. Many lenders will charge $10 to $20 for every 100 dollars that they lend you. If you urgently need the money and can pay it back within your next pay check, it might make sense; however, payday loans are not designed to be taken out if you need a long term loan. One disadvantage to cash advance loans is that you must provide a backdated check so the day the money is due; the lender tries to automatically deduct the money out of your bank account. If you’re not able to pay the loan when it is due, the fees can add up.
The Verdict
If you want cash quickly and can't borrow from a friend, a payday loan will get you the money quickly; however, remember that it is a short term loan that must be paid back within 30 days. Before applying for a loan, you should ask yourself if the need is worth it and are you able to pay it back quickly. If you’re looking for more options, consider bad credit personal loans. The advantage is that you’ll be able to qualify for a loan even if you have bad credit, and the repayment period may be longer.