Tag Archives: pay

Credit Card Cash Advance or Payday Advance?

November 28, 2019   Loan Tips

People will always have some reason for needing cash that they do not have. It does not always have to be an emergency such as unexpected expenses in between paychecks. It could also be because they want buy big-ticket items or go on a grand holiday. For whatever reason, two of the fastest ways to get funds is through credit card cash advances or payday advances.

Both have its advantages and disadvantages. It all boils down to the borrower’s ability to pay. Below is a comparison between the two options:

§ Payday advances have a higher interest rate than cash advances from credit cards. The $10 to $30 finance charge per $100 borrowed may not seem too much to pay at first, especially if the borrower is able to pay off the loan after two weeks. However, if the borrower cannot pay on the deadline, the finance charge is compounded for every week that the loan is unpaid, a rate of increase much faster than for credit cards.

§ Credit card cash advances can take a longer time to pay. The usual practice of credit card companies is to apply payments to any existing balance first before paying off the cash advance itself. Unless the payment is large enough – certainly well over the combined minimum payment for the current balance and the cash advance – it will take a long time for the borrower to make a dent on his credit card debt.

§ Payday loans have no effect your credit history. Because the terms are quite short and the loan is guaranteed against the borrower’s next paycheck, payday advances do not contribute to or detract from your credit score. This is unlike credit card cash advances, which are included in your credit history.

§ Borrowers get cash faster with payday advances than with credit card cash advances. There are usually less requirements, no faxing of documents and credit history checks, making the loan process faster and the loan guaranteed, more or less. On the other hand, credit card cash advances are subject to credit history checks and is not guaranteed.

Based on the pro’s and con’s listed above, fast cash loans, like payday advances, seem to be the better choice over credit card cash advances. However, the borrower has to keep in mind that fast cash loans are short-term loans only and should not be used as a long-term financial solution. It is better only if the loan is sure to be paid on or before the deadline.

If the borrower is not sure that the loan can be paid in two weeks, a credit card cash advance would be better because of the longer period for payment. However, one should not make a cash advance on a card with a large balance or, worse, maxed out. People should avoid maxing out their credit cards because it becomes harder to pay several of these at once. In the end, only the borrower can decide which of the two options – payday advance or credit card cash advance – is more suitable for the situation.

Read More

Loans for people with poor credit

November 20, 2019   Auto Loans

People with bad credit history are likely to find it difficult to get a loan from a high street lender. Thankfully, Loan options are not limited to high street lenders.

If you’ve experienced credit problems such as defaults, Mortgage arrears or other credit problems, you should consider bad credit loans; these are loans tailored to people with poor credit and are subsequently less stringent on requirements.

Loan Options

1. Secured loans A secured loan is a loan for which you have to offer some form of collateral. In the UK, collateral is usually your home, although in smaller loans it can be a car or other assets that you own.

If you’re a homeowner, a secured loan is the best option simply because it would attract a lower interest rate; your home (collateral) provides security to the lender therefore lowering the risk despite having a bad credit rating.

2. Unsecured loans Also referred to as personal loans, these are loans that are given without any collateral; the lender has to trust you as they risk loosing out should you default on the loan. The lender uses your credit rating to evaluate the risk of you not being able to pay back the loan, a poor credit rating would make you a risk, coupled with a lack of collateral, most lenders would view it as a high risk loan. Those lenders that are willing to offer such loans, charge very high interest to compensate the risk.

Other disadvantages of unsecured loans for people with bad credit include: & 61607; The amount you can borrow is relatively lower than on secured loans. & 61607; Although the loan is unsecured, your assets are not completely safe, if you fail to pay back the loan, there’s a risk that collectors may repossess them. & 61607; The repayment term would likely be shorter.

Alternatives to unsecured loans Credit cards If you’re unable to get a personal loan because of poor credit, you should consider credit cards for people with bad credit; these also have a high interest rate but you’d only pay interest on the amount you owe. Credit cards are also flexible; you can payback what you owe sooner whereas loans normally have a fixed term, you can also re-use money you paid back on the credit card whereas loans do not allow you to do this.

Secured loans Even if you’re not a homeowner, there are other types of assets that a lender may accept as collateral; e.g. some lenders would accept cars as collateral for small loans. What you can do to improve your situation One of the factors used to determine your credit rating is your credit history; a credit history is a record of financial dealings in your past, missed payments, defaults or similar bad dealings equate to blemishes.

Over time, you can make your credit rating more positive by exercising good borrowing e.g. if you have a credit card, mortgage or car loan, make sure you make your payments in time, do not go over the authorised limit.

Another factor in determining your credit rating is the amount of debt you currently have; too much debt increases the risk of you failing to keep up the payments. The more you pay down your debts, the less of an effect this has on your credit rating.

Read More
« Older posts
Newer posts »