Many people have used payday loans in the past as a short- term solution to their financial woes, and now you could be thinking about using a payday advance to supplement your bank account too. It’s hardly controversial to say that payday loans often receive a bad rap due to their relatively high interest rates and fees. However, there are some cases where using these loans when cash is needed may benefit you. Each situation is unique, so it is important to analyze a few factors before you decide if you should apply for a payday loan today.
Other Options Available to You
First, you should consider if there are any other options which are available to you for financing. The fact is that payday loans only provide a borrower with short- term financing, so if you need funds available to you for longer than a week or two, it may be advisable to take a cash advance out on your credit card or to ask a friend for a loan. You should also keep in mind that payday advances won’t lend much more than a thousand dollars, so these loans are probably not suitable to those who need to borrow a considerable amount of money. Other options may be more affordable and may be more suitable for your needs.
The Total Costs
In addition, you should pause and consider what the total costs of the loan are. Consider both the interest charges and loan fees associated with a payday loan. Your alternatives to applying for a payday advance are to struggle without any type of financial assistance at all or to use another financing option, such as a credit card cash advance. Both of these options also typically have costs associated with them. For example, if you’re considering borrowing money because you have an outstanding credit card payment, the option to struggle through the next few days without a cash advance would cause you to make that payment late. You may be forced to pay a late fee, and your interest rate may increase. This rate increase may result in higher monthly payments for months to come. On the other hand, if you use a credit card advance, you will usually be charged an advance fee and be subject to interest charges on your balance until you pay the amount off in full.
Many people rush into applying for a payday loan because it is the most convenient option available. These loans are designed to provide you with almost instant cash through a convenient online application and direct deposit of funds. However, you should pause and consider the costs of these loans in comparison to the costs associated with other options before you apply.