What are the Advantages and Disadvantages of Cash Advance Loans?

By Brown Ezilon.com Articles Published 06/5/2011 | Cash Advances

The advantage of cash advance loans is that they are an immediate source of financial remedy if you find yourself short of money and need to pay an emergency expense fast. These cash advances can also come in handy when you are traveling or have to face situations when far from home.

However they do have disadvantages such as high interest rates even if the advances are only for a short period. If you do not repay the loan on time the interests can soar ever higher and leave you in real financial difficulties. This means that cash advance loans can appear to provide financial relief initially, but can prove a very expensive solution in the end, so you should really consider how bad your financial need really is before opting for this solution.

Cash advance loans can also become addictive for some people, who find it very convenient and easy to opt for this solution even when they do not really emergency cash. Cash advance loans should only be used for extreme situations and not for extravagant spending.

Some people also consider cash advance loans as a way to get by until the next pay check comes in. This may be the case, but the fact remains that it is an extremely expensive way to get money and you will soon be spending much more on monthly expenses than you would normally with the added interests. Keep in mind that this is one of the most expensive forms of loan that can lead you into long term debts.

In order to avoid nasty pitfalls make sure you understand the use cash advance loans have and find a reliable loaning company that can be reasonable with the interest rates and terms of payment. They should not be set to exploit you but to give assistance when in financial straits.

Be very careful with interest rates as what begins with a mere twelve or sixteen percent can easily turn into two hundred and fifty percent in the long term. Cash advance loans only run for short periods, usually between two to four weeks, the interest rates ranging from 15% for the first fifteen days and can rise up to 30% for the whole month. If you cannot repay the loan and need to extend it to a year you could end up paying 360% by the end of the process.

Now of course you do not want that to happen, this is why you should choose a reliable and reputable loaning company that will be able to counsel you on how to tackle your cash advance loan avoiding such debts.

On the other hand there is no doubt that cash advance loans is a fast and easy way to get ready cash compared to other types of loans and can really prove a salvage when in time of need. In addition loaning companies will barely check your credit history and even if it is not good this will not be an obstacle for obtaining cash advance loans. All the loaning company will ask for is a guarantee for the payment such as regular salary or a post-dated check. All you have to consider is whether the reasons for applying for cash advance loan is economically constructive for you personally.