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Personal Loan vs. Payday Advance: Which is Better?
So youve found yourself in a bit of a financial bind, and need a little help to get through it. Dont be embarrassed; its happened to just about everyone at some point or another. What you need to do now is figure out how to deal with it in the best way.
And if your credit cards are maxed out, and your family members or friends cant help, there are only a couple of real options: 1) a personal unsecured loan, or 2) a payday advance.
Both Personal Loans and Payday Advances may help get you out of a short term financial jam. So now comes the very valid question: Which is better? Well, that can depend a lot on your personal situation, and what you hope to get out of the situation (besides the obvious cash). So lets take a quick look at both.
PAYDAY ADVANCE (LOAN): Its a cash advance, not a loan!
Many people refer to this option as a payday loan. However, the more accurate description is “payday advance.” It is not a loan. It is a cash advance with a large fee. You write a check to the Payday Advance company. They typically give you 80% of the check amount in cash, and then they hold the check until your “payday” which is typically when the money to cover the full amount of the check will be in your checking account. The Payday Advance company then deposits the check and keeps the 20% as their fee for the cash advance.
Odds are youve seen the brightly lit signs of a Payday Advance shop next to some liquor store or in a strip mall, or you have seen them advertised on TV, in e-mails or in banner ads online. The amount of money Payday Advance companies can provide is limited by state law and is typically a maximum of about $500. In California, the maximum advance is $300.
So, the advance may be enough to get you through small cash emergencies when youre between paychecks. If you need a quick couple of hundred bucks for groceries, if your cars alternator goes out, you chip a tooth, etc a Payday Advance might be a viable, but very expensive, option.
However, very often a Payday Advance is only enough to delay the cash emergency for a few weeks, and not enough to get you totally out of it. As a result many people find themselves getting multiple Payday Advances, which can be extremely expensive when each advance costs you a 20% fee. Ten payday advances over the course of year would equal an effective interest rate of over 200%! A very expensive way to go.
And, since a payday advance is not an actual loan, it can do nothing to help your credit status.
PERSONAL LOANS: Get much more money at a much lower cost.
A personal loan is actually a loan that you repay over time via affordable monthly payments. You can get much more cash than you get from those payday advance places – and you dont pay a 20% fee over two weeks!
Of course, if your credit isnt perfect, your bank will turn you down very quickly. However, CashCall makes personal unsecured loans, up to $5,000, to people in a cash jam, who have less than perfect credit! This is the kind of money that can really help if youre facing major car repairs, medical issues, looming bills, etc. The loan money is placed directly into your checking account in about a day, and there are no limitations on how you can use your cash. Its up to you.
A personal unsecured loan from a company like CashCall doesnt require any collateral or security. You dont need to be a homeowner, you dont need to turn over the title to your car you dont need to do anything except apply, and provide some simple paperwork. The cash can be in your checking account the next day.
You use the money to get out of the jam youre in. And then, you can either make the affordable monthly payments or repay the loan when you can. There are never any fees or penalties for repaying the loan early, and you will minimize the interest you pay by repaying the loan sooner rather than later.
Another benefit of a personal loan from CashCall is that you can actually improve your credit score by making your monthly payments on time. Thats right, you can rebuild your credit because CashCall provides all three credit agencies (Experian, Transunion, and Equifax) with your payment information because it is an actual loan, not a cash advance! And in the long term, thats the kind of thing that can truly get you back on your feet.
CashCall Personal Loans offers high-interest-bearing, unsecured term loans to qualified borrowers who typically use the loans for one-time purchases and debt consolidation. These loans of up to $5,000 are processed entirely over the Internet, phone and fax, and funds are wired into the borrowers checking account typically within 24 hours. CashCall Personal Loans are a good alternative to Payday Loans for borrowers. While interest rates are high, they are typically much lower than those of payday lenders, and CashCall Personal Loans have the potential to help customers rebuild their credit score by making payments on time.
Getting A Home Loan – How To Find The Best
When you have a credit score ranging from 720-750 chances are you will get a nice interest rate an affordable loan overall. If you have a down payment and a nice credit history, then you will definitely get the best loan possible!
For the rest of us, we will have to spend a little time working on our credit. These days a lender has to do a lot of investigating to see if you are a credible applicant to give a loan to. Lenders will probe your credit report for late payments, missed payments and judge you based on your debt to income ratio.
You could be approved for a loan with scores ranging from 620-650 but it will not look nice on paper. You will be at the banks mercy to pay large amounts in closing costs, extremely high interest rates and usually other fees as well.
Do not worry; there are easy things you can do to quickly put you in a better loan obtaining position. First you need to get a copy of your credit report. Check for any mistakes or old information to be deleted.
Then you need to know your debt to income ration since this is vital information lenders look at. To make it better, start paying off balances or earn more income. If you can increase your pay and post it towards your balances you will be in the perfect position even quicker.
Why is there such a dramatic change with in the last few years in the housing industry you ask? It is simple to understand what went wrong and who is truly at fault for such a struggling economy.
The government gave too much control and confidence to the banks for their lending objectives. Bankers were so greedy to make money that they gave huge loans to irresponsible and unqualified applicants.
It was simply way too easy to get quickly approved for a home loan back then. As long as you could provide a viable credit score lenders would make you an offer. All you had to do after that was decide how to decorate.
Today a lot of those people are struggling to repay their home loans. This in turn has created a huge fall in our economy. People are skipping payments and are finding themselves in a foreclosure situation.
It crucial to be aware of your credit situation before you apply for a home loan, especially in today’s economic crisis. Do not settle for any a loan approval.
Take the time to boost your credit score so you qualify for the best loan possible! Do your homework and you will be excited with the money you will save.