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Pros and Cons of a Cash Advance or Payday Loan

By Edited Oct 17, 2016 0 0

Pros and Cons of Payday Loans/Cash Advances

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Getting cash almost instantly in the way of fast payday loans may appear appealing and convenient, especially if you've lost your job or have an emergency. The ability to have the cash in your bank account within 24 hours may make the option of a cash advance almost irresistible. However, there are other factors to consider before applying for a cash advance, or payday loan. Here are some of the positive aspects as well as the negative points regarding payday loans.

Positive aspects of a cash advance or payday loan

  •  You can take care of an emergency within hours of applying for a loan.
  • Bad credit does not matter.
  •  You don't need collateral.
  •  There are no restrictions on how to use the cash.
  •  You may apply online from the privacy of your own home.
  • You can avoid disconnection fees on utilities.

Negative aspects of a cash advance or payday loan

  •  The full loan amount will come out of your next paycheck.
  •  The lender automatically debits the due amount from your bank account. If the complete amount is not available, you may incur additional fees.
  •  Some lenders will allow you to roll over the cash advance amount. However, you will most likely pay a fee for the roll over. Multiple rollovers generally mean multiple fees. You are responsible for the total amount, which includes the loan amount, the interest, and all or any fees.
  •  Borrowers normally end unable to pay off payday loans because of high interest rates and numerous fee. They find it difficult to meet their monthly financial responsibilities in addition to paying off payday loan debt. The result is stress and financial burden, not only on the borrower, but also on the family as a whole.

Whether or not to get a cash advance or payday loan is a personal decision. Nonetheless, it's important to realize that the majority of the time a payday loan does not bring lasting relief from debt related issues. Instead, payday loan debt often worsens the situation. For this reason, payday lenders are obligated to inform consumers that a cash advance or a payday loan is a short-term solution. Consumers should look for other options and resort to a cash advance only as an absolute last resort.

Copyright © 2011 Ana Jackson. All Rights Reserved. Reproduction in whole or in part constitutes plagiarism, is illegal and strictly prohibited.


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