When Is The Right Time To Use Payday Loan Services
October 11, 2009 by Fred Jones
Filed under Cheap Payday Loans
Not every personal matter, debt woe, or credit problem is good for a cash advance loan, or referred to as a payday loan or PDL. Cash advance payday loans are short-term loans that provide people with money upfront, but require them to pay the full balance back within a short time period, usually the next payday. There are advantages to short term loans, but there are also some things to consider before getting one to know if short term loans are right for the situation. The following info will go over some of the reasons people use cash advance loans to show when is a good time to use them, and when they should avoid getting one.
Pros of Cash Advance Payday Loans:
* Credit checking is not required, and the loan info doesn’t get reported to the credit bureaus so these loans don’t effect credit history or score. This can be both good and bad as it helps to be able to get a loan without a credit check, but at the same time it doesn’t help improve credit either. If a person gets a short term loan and fulfills their obligation on time, it will improve their credit score, but they don’t reflect negatively if the loan is not paid back on time.
* Approval is quick and simple with little more than a checking account and id needed. Short term loans are secured using a checking account so all a person needs to do to get a payday loan is have a checking account and they can get cash within hours without a huge amount of paperwork.
* There a one-time fee for cash advance services and they do not charge installment payments or interest for these loans. Although they are required to call it APR, short term loans don’t have any installment payments, but rather a person makes one payment to the lender and pays the balance in full. The fee is capped in most locations, but check with local state regulations for the fees for payday loan services.
Cons of Cash Advance Payday Loans:
* These loans don’t help improve credit scores or get reported to agencies. This means that these loans don’t help improve credit.
* Short term loans require that the full amount to be paid back within a couple of weeks, so unlike traditional loans where a person is paying back the balance in small increments, these loans have to be paid in full by the next payday. This means that it’s important to only take what a person can reasonable pay back within the period allotted.
Right Times To Use Cash Advance Loans:
* Car repairs – Vehicles break down all the time, and this can be one of the most stressful things in life as people are not sure about repairs, costs, and how they are going to continue getting to and from work. Having so many things to deal with and being short money on top it makes this scenario perfect for cash advance loans. People can get the money they need today to fix their car and get back on track without any worry of being short funds.
* Unexpected Bills – Ever get a parking or traffic ticket, or other bill that is quite big and throws a monthly budget out of sorts. Paying off traffic and parking tickets, or other last minute surprise expenses is another situation where cash advance loans can help. These loans can get the cash needed quickly to make sure the bill doesn’t escalate to the point where it is harder to pay off. Some expenses and bills are very sensitive so making sure they are paid back on time is important and could be a good situation to use a cash advance loan.
* Not Paying Late Fees – Everyone has times when they are just short money for whatever reason and they are not sure how they will pay their bills. The problem is that almost all credit services will charge late fees for payments not paid on time. The late fees that companies apply can add up quickly and make another expense in themselves. Getting a payday loan to avoid paying late fees is also a good situation to use cash advance loans. Late fees from lenders can be as high as $50 for just one company, and they don’t care what the balance is of the account or the amount due for the payment. If a person pays late they will be charged the same high fee. Getting one or two late fees may be okay, but if a person has to decide between getting several late fees or paying a cash advance fee, they better option would be the cash advance fee. The reason that the cash advance fee is better is because paying credit late not only charges a person money, but reflects negatively on their credit history and can hurt their credit score. Given a scenario of paying late fees and bad credit score over a short term loan fee, the better choice would be the short term loan and save the person’s credit score.
