There are times when money is tight. This will happen to everyone at some point in their lives. They need money right away to keep from having checks bounce or missing important payments. A cash loan or paycheck advance may seem like a good idea if you have a steady source of income and only need money for a short time. But be careful, because they are often not as nice as they seem.
Cash loans are for small amounts and can be set up quickly and easily. They are for short amounts of time, but the interest rates can be very high. The whole loan can be set up in minutes, and you usually have to show your paycheck or some other form of security, like the title to your car. If you get the loan, you can leave with a check or have the money transferred to your account right away.
But they are very expensive ways to get credit. Most credit cards give you a grace period during which you can pay off your bill and avoid paying interest, but most cash loans start charging interest right away. There may also be fees and other costs for setting up the loan. When you add all of this up, the interest rate is often shocking. In fact, even the high interest rates that credit card companies charge for cash advances may end up being much cheaper than cash loans.
There are alternatives to these cash loans, which is good news. One of these is going over the limit on your checking account. This is something your bank will give you, and it will cost you money, but it lets you spend up to a certain amount more than you have in your account. Even though the fees and interest rates are different, they should be less expensive than cash loans.
You could also talk to your creditors and try to get more time to pay them back or change the way you pay them back. If you are having trouble making payments, many lenders will be willing to work with you. For instance, they might be willing to make the loan last longer so that your monthly payments are lower.
Lastly, if you do need a cash loan, try to get just enough money to get you through until your next paycheck. Then, as soon as you get the money, pay back the loan. It's tempting to ask for more time on the cash loan, but the cost isn't worth it in the long run.
