Monetary emergencies can come anytime and the moment of urgency leads people to accept any cash advance option available to them without doing any comparison. Cash advance is considered as one of the best options for getting some urgent money with no or less paperwork. Before choosing the best cash advance option you should understand few key things that will help you take this decision wisely. Behind any business, there is a profit model and lenders giving cash advance are no different. They will either charge high rates of interest or keep an astronomical penalty in case of non-payment. After all, lenders are doing it for profit. So we recommend below few points that one must keep in mind before choosing the best cash advance option.
1. Make sure the payment process is quick
First things first, you should not be wasting your time with traditional advance payment options if you are in quick and dire need of money. Since time is of an essence, the cash advance should be credited to you as fast as possible, say within a day or few hours. Hence you should inquire the delivery time for money to your lender. Normally a typical cash advance payment is credited in a day to the borrower. Check out if there are too much of paperwork and the process is tedious. Go for an option where you get a breathing space to survive the financial crunch you are already in.
2. What is the interest rate?
Interest rates for quick personal loans or cash advances are usually higher than other borrowing options. The good thing is that there are many competitors out there competing to gain more customers and thus offering reduced rates of interest. Some cash advance companies make sure to keep interest rates reasonably below what credit card companies offer. The lending options can be a bank or peer to peer lending or other alternatives which brings us to the third point.
3. Check for alternatives
Sometimes you may not realize that credit card companies don’t offer the best deal to you. They promise a compelling deal and appear like a friend in need. However, if you compare their interests and amount they offer with other lending options like peer loans, numerous cash advance lenders, and companies. Before you reach to companies for help you should consider asking your kith and kin. After all, a friends and families support is needed in desperate times. If you choose a cash advance option, compare the features like APR, fees and so on. For example, some companies decide the APR rates based on tenure of the loan and if you don’t need that period to be long, you can save yourself some money by comparison based on these factors.
4. Read the offer carefully
Sometimes the APR rates may be low and fees for a cash advance may be low but there are factors like penalties for late payments to be considered. Since you are already in a financial crunch, ask yourself if you will be able to make the payment back on time. If your source of income guarantees you a payment few days or months after you took a cash advance, then the late payment should not worry you. Otherwise, it’s always a safe bet to go for cash advance options with lesser penalty amount. Also, find out if your credit scores matter when the interest rate is calculated.
Most importantly don’t take a cash advance if you think you won’t be able to come out of the debt cycle. The cash advance option should be considered only during emergency situations and above tips can help you choose the best cash advance option.