Different Types Of Cash Advance Loans
For most people, applying for cash advance loans is necessary at some point during their lives – whether it is to cover the cost of an emergency situation or if some extra cash is needed to get through the month. There are a variety of different loan options available that are designed to meet specific requirements.
1. Short Term Loans
The term of a loan usually refers to the period over which an amount needs to be repaid to a creditor. Short term loans have a repayment period of under 6 months and limit the amount of money that will be approved. The interest rate on short term loans is normally higher than you would expect to receive when applying for a long term loan.
You can apply for short term loans from your bank or other regular loan providers as long as your credit record is in good standing. However, if you do not have a good credit rating it may be necessary to opt for other cash advance loans.
2. Bad Credit Loans
No matter how bad your credit rating, bad credit loans are a good option when you need cash in a hurry. Even if you are blacklisted, there are no credit checks and your loan amount should be approved within 24 hours. In addition you can choose a repayment period that is affordable to you.
However, you need to be aware that you will be paying a higher interest rate than would be charged from a regular loan provider for a short term loan. So choosing a lengthy repayment period will result in you paying less on a monthly basis but will mean that you pay much more to service the loan over a period of time.
3. Payday Loans
These type of loans offer an even shorter repayment period where the loan amount and interest needs to be repaid by the time you receive your next salary check or wages. The interest rate is much higher for payday loans, often exceeding 30%.
The danger with payday loans is that you could end up in a never ending downward spiral where you hand over your entire income only to be forced to take out another loan to cover your monthly expenses. It is very important to ensure that you only apply for an amount that you can afford to repay within the set period without making further loans necessary when taking this option.
4. Pawn Loans
You can choose to pawn an item for quick cash which usually involves repayment (including interest) within 30 days to reclaim your the item.
When choosing any of these loan options, it is important to keep the following in mind:
– How much money do you need?
– How urgently do you need the cash?
– How much can you afford to repay on a monthly basis?
– Do you have any other options available to you such as borrowing money from a friend or family member where you won’t have to pay any interest?