Payday cash advance loans are some of the fastest growing lending methods on the market these days. There are many people who are opting for this type of lending as it is available easily in several ways.
As the lenders are giving online payday loans, this makes it a hassle-free way to get direct cash within hours. This feature of getting fast money with less paperwork is only adding to the popularity of payday loans among the general public. But there are several doubts about these types of loans that need to be cleared.
People generally believe that taking these types of payday loans will boost their credit score. Well it is true that online cash advance loans are easily available and it is also hassle free to pay them back. But in your credit score, this loan will not add that much positive rating as it will add negative impression for any other bank or financial institution. Taking this type of loan can actually hurt your ratings in the long run.
The basic structure of payday loans is that you take it in the start or middle of the month only to pay it later in the month on your payday. This structure shows that these loans are taken by people who have problems in managing and planning their expenses and this is the reason banks don’t take these lenders positively.
But it can be easy to avoid payday loans. You have to plan your expenses in advance according to your income and stick to that plan with discipline.
Avoid spontaneous spending when paying off payday cash advance loans
If you are deciding to go for a big night out, it is better to plan about it in advance, and any spur-of-the-moment decision is not good for your financial health. It is better to delay such plans then execute them instantly without any financial planning.
Sometimes you may need to buy some things fast and as you are strapped for cash, you decide to contact cash advance lenders. But there are more prudent routes that you can take, like using a credit card or simply reassessing the need of that product.
The most prominent difference between a payday loan and an installment loan is that the interest in the installment loan is divided in to yearly installments. Due to this, you feel less pressure on your pockets and also pay less when compared to the exorbitant interest rates of payday loans.
Taking out a credit card cash advance is also a better option as they come at lower rates of interest than payday loans. In fact, if you pay them off on your next bill cycle, you won’t be charged interest at all. This is why you can save plenty of money, but you get the loan instantly with an option to pay in installments or on your next payday.
If you are planning a vacation, then it is always better to take a loan that gives the option of a longer time frame for repayment. This way financial pressure would be less in the short term and chances of making panic lending decisions for immediate expenses will be lessened.
Payday loans may give you the option of direct cash, but this is available in several other type of lending options as well, which have far less interest rate. That’s why you should try to avoid payday cash advance loans as much as possible.