A Cash Advance Online Saves Nine: Tips on Using One Wisely
A cash advance online is perfect for people who need to borrow a relatively small amount of money for a short time. Because they are unsecured financial products and typically needed for emergency situations, these loans generally feature high interest rates and fees. Instead of allowing a cash advance to escalate, which is likely to cause you more financial headaches, take one out the right way. In this case, a cash advance online saves nine. Here are tips for using one wisely.
Cash Advances Online Saves Nine: How to Use Short-Term Cash Wisely
Tips for using cash advance loans wisely range from taking one out for emergency situations only to determining the exact amount you need to resolve a financial emergency. Avoid getting into a cycle of debt and do what you can to compare loan terms. Also, pay the money back as quickly as possible. The Washington State Department of Financial Institutions recently chimed in on using cash advances the right way by advising borrowers to make sure that they’re working with an authorized lender and that they’re verifying the final cost for this kind of loan.
Use Cash Advances for Dire Financial Emergencies Only
Online cash advance loans are not meant for casual financial situations like dinner with friends or a night out at the movies. Only consider this borrowing option when you’re in a dire financial emergency. This may include needing a prescription refilled or visiting an urgent care facility due to a sick child.
If your car breaks down or a tire blows out, then you may need cash to resolve the issue. The financial repercussions of not getting your car back out on the road quickly are likely worse than the cost of taking out a cash advance online loan. Often, the borrowers of cash loans have poor or no credit, making the cost of borrowing cash high because the lender is taking on more risk than other lenders.
Take Out Only the Amount Needed
When it comes to online cash advance loans, it’s important to determine the exact amount that you need to resolve your financial emergency. Short-term loans like cash advances are easy to get, but it can be a challenge to repay them. Keep in mind that when you borrow more, you must pay more back. In addition, larger loans accrue higher amounts of interest. In many cases, fees are higher as well.
Avoid Getting into a Cycle of Debt
Since you’re borrowing from your next payday, you’ll have to budget harder to pay the loan back. The last thing you want to do is skip an important bill to repay a cash advance loan. According to a study completed by the Consumer Financial Protection Bureau, or CFPB, more than 80 percent of these types of loans are rolled over or followed up with another one.
If you take out a cash advance loan, then do everything you can to pay it back by the due date. After you repay the loan, take steps to begin a savings account. This will help you avoid the need for a short-term loan in the future.
Compare Cash Advance Online Loan Options
By comparing cash advance online loan terms, you’ll be able to select the best loan for your financial emergency. While you may not have a lot of time to compare terms during urgent situations, check into as many different loan options as you can. Ask about interest rates and payoff dates. Also, if your credit rating is poor, then consider acquiring a loan that will report positive payment history to the major credit bureaus.
Pay the Loan Back Fast
If you pay the loan back fast, then a cash advance can be an affordable way to borrow money. Extended term loans may be easier on the monthly budget, but they will cost you more in the long run. Many borrowers accept the maximum repayment term for reduced payments, but if you can pay more, then do so as you’ll save money over time. Choose the shortest repayment term you can handle. However, make sure that the loan does not come with early repayment penalties. Reputable lenders do not usually charge these types of fees.
Work with an Authorized Lender
To determine a lender’s authenticity, check the states where the company operates. Lenders and loan brokers are required to register in the states where they decide to do business. If you’re unable to locate this information on the lender’s website, visit financial regulation websites or the site for your state attorney general’s office. When you visit a lender’s site, make sure that it is a secure one. Also, look for a physical address.
Confirm the Final Cost of a Cash Advance Loan
Short-term loans like online cash advances often feature incredibly high interest rates. Before accepting the terms of one, ask the lender what the full loan cost will be. Regulations require lenders to divulge this information. Keep in mind that these types of loans frequently feature an annual percentage rate, or APR, of 400 percent or more.
Borrowers who need cash quickly usually seek loan amounts that range from $500 to $1,000. While the fees will vary based on the state in which the lender operates, expect to pay something like $15 for every $100 that you borrow. Some states cap this amount. A number of states also limit the interest rate that lenders can charge. The 400 percent APR comes from the short-term nature of these loans. When you pay $15 for a $100 two-week loan, the APR comes to about 400 percent.
Make Your Cash Advance Payments on Time
If you’re late on your cash advance loan payment, not only could this impact your credit report, but you may also wind up with additional fees. When borrowers are unable to make their loan payments on time, they often roll the loan over into a new one or take a second one out to cover the first. If you do this more than once, you’ll likely owe more in fees than the amount that you borrowed. Consider setting up an automatic payment to avoid being late.
Protect Your Financial Future by Using Cash Advances Wisely
When you take out cash advance loans, do so wisely. Borrow just the amount that you need and only for emergency situations in which you have no other options. If you take out a short-term loan, pay it back by the due date. Also, do everything possible to avoid getting into a debt cycle that involves rolling loans over into new ones.