With nationwide unemployment rates at record highs, there are many people that are relying on cash advances in order to survive. However, there are still many people that apply for them just about every time they’re a little low on cash. Or even work, some people use cash advance loans to purchase something that they actually can’t afford. Nothing is wrong with being broke. We’ve all been there at some point or another. Using a payday cash loan advance is perfectly understandable if you experience a financial emergency. On the other hand, applying for a cash advance loan just because you’re a little low on money or because you’re too impatient to wait until your next payday is bad budgeting practice. Going to cash advance companies and applying for cash advance loans just to have extra money in your pocket is a bad idea. Instead, try putting sound budgeting methods into practice. You’ll be far better off.
Don’t get me wrong, if you’re able to repay the cash advance loan with your next pay check and you’re not going to be strapped for cash afterwards, this is fine. If you’re only borrowing a small amount of money, it’s not as risky as taking out a $1500 loan. If you’re taking out a small loan to pay off a bill that can’t wait until payday, this is logical. At the same time, you still need to be careful or you can find yourself in a bad financial spot in the future. It is also a good idea to pay attention to the interest associated with your loan.
The interest rate on cash advance loans are far higher than that of most credit cards and personal loans that you can obtain through a bank. Most people with poor credit can’t qualify for unsecured credit cards or personal, so payday advance loans are their only option. In lending, interest rate is tied directly to the risk of the loan. Payday advances are risky to the lender because they typically will not check your credit and they are basing the approval of your loan on your income alone. A lot of people default on cash advance loans, so as a result, a higher interest rate is attached to the loan to help the lender recoup some of costs in case you default.