When youre in a tricky financial situation, a cash advance can give the money you need to stay afloat. You can find a lender online, fill in a short application form and within no time at all the money will be in your account. You dont even need to have a healthy credit score to get approval. It sounds like a fantastic solution to your situation and could put you in a more comfortable position. So why do so many financial advisors tell us not to use them? In most cases, this is primarily due to their high-interest rates, strict repayment plans and costly fees. If not handled correctly, it could put an even bigger strain on your finances. So if youre unsure whether or not a cash advance is right for you, answer the following questions.
Do I really need a cash advance?
Its vital that before you start applying for a cash advance, that you consider why you need the money in the first place. Cash advance application forms are easy to fill out and often dont require extensive background checks. While this is good in some respects, it can also make it easy for people to act on impulse. It can be exciting to have money put into your account with just a few clicks of your mouse. But reality will soon hit when you have to make repayments. If this is not done within their designated time frame, they will charge you for late repayment fees. Even if you only apply for small amounts, you can quickly become reliant on these lenders. Your one-off loan can quickly turn into something you apply for on a regular basis. This is irresponsible borrowing and will undoubtedly put you in a worse position as a result.
While you wont have any restrictions on what you can spend the money on, it should only really be used in emergency situations. If you cant pay your bills because you arent getting paid till next week, that is a valid reason. Another reason is that you have to pay for home or car repairs to keep your family safe. For further examples of financial emergencies, visit investopedia.com. You should not be taking out loans to pay for things you want rather than what you need. If you dont carefully consider the reasoning behind wanting this money, then it could be something you regret later on. So have a clear and valid reason why you need this money before you begin.
What other options do I have?
While you might think that a cash advance is your only option, this may not necessarily be the case. You could have other means of dealing with your financial emergency without the need of an advance. You could borrow the money from your partner, a friend or a relative. Its likely they will give you longer to pay them back and be more lenient than a lender. You could pay them back in instalments or offer to work for them in your spare time. You might have lent money to a friend recently, and now you can ask for some or all of it back. If you have a car you no longer use, you could sell it at a local dealership. You could even take some of your high-value possessions to a pawn shop for fast cash. Some pawn shops do have buy back schemes where your items cannot be sold. This means you can buy them back once you are in a better financial state.
These options could be less expensive and smarter ways of dealing with your situation quickly. Even though you might feel embarrassed to ask for help, its always better than to suffer in silence. It will lift a huge weight off your shoulders and help you deal with your financial crisis more effectively. Only once you have exhausted all of your other options should you consider applying for a cash advance.
Can I make a quick repayment?
The only way of avoiding late fees and escalated interest rates is by paying back the money as quickly as you can. Each cash advance company will have differing time frames in which you have to repay the advance. This will often depend on the amount you have borrowed. Usually, they can range anywhere between two weeks and three months. So to help you determine whether you can make a quick repayment, you need to establish how much time you have. Visit PersonalMoneyStore.com and other cash advance websites and read their terms thoroughly. This should give you a clear indication of the timescales you have to agree to once youve applied for a cash advance. Another option is to call cash advance stores directly. Most reputable lenders will include a telephone number online which customers can use for inquiries. Its always better to know what time you have to work with beforehand rather than once you receive the money.
Once youve established how much time you potentially have, you should look at your financial records. This should include your bank statements and upcoming bill payments you need to pay. This will make it easier to devise a plan of action and determine how much you can comfortably repay within the time. Keep in mind that some lenders will have hidden cost that you might not know about immediately. So remember to factor this into your repayment plan. If you are unable to make a quick repayment, then a cash advance might not be the best option for you. Be honest with yourself and never apply if you arent in the right position to do so.
Once youve answered these questions honestly and realistically, you can then decide whether to apply or not. Cash advances are fantastic for people who only need a one-off loan and can pay them back quickly. But becoming too over reliant on them can make your financial state even more vulnerable. So always consider your options and understand what the advance involves before starting the process.