When you are in need of a quick cash, there are several sources you could turn to get a short term loan. You could borrow money from your friends or family, ask your boss for an advance in your salary, get a cash advance from your credit card, or you could turn to a pay day loan to help with a short term loan. These last two options tend to be the most popular among consumers, but which one makes the most sense for you and your financial situation? Many consumers who need cash now turn to the pay day loan industry as this is the most convenient method to get a short term loan.
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Pay day loan lenders will loan consumers anywhere from $100 - $1,500 as a short term loan and will expect repayment of the borrowed amount plus a finance charge on your next payday. A typical finance charge is $15 for every $100 borrowed. So lets suppose you get a pay day loan in the amount of $200. This short term loan will cost most consumers with average credit around $30. So in a couple weeks when you get paid you will repay the $230 and be done with it.
Now if you were to get a cash advance for a short term loan from your credit card company you would have a minimum payment due on the loan each month until the loan is repaid. Credit card companies charge an average of 29% for cash advances that will typically take consumers at least a year to pay back the balance. Getting a cash advance is okay for consumers that don't mind adding to their credit card debt and prolonging repayment however if you really want a convenient short term loan with simple repayment terms then getting a pay day loan is the most financially prudent decision.
You may have heard that pay day loans have high interest rates or an APR that is much higher than credit cards, but that is only true if you actually held out a pay day loan for an entire year which no one is able to do under normal circumstances. If you do the math for a $200 loan taken out with a $30.00 repayment fee in 2 weeks, you will have paid $30.00 in interest for the short term loan. However, if you took out that $200.00 as a cash advance on a credit card earning an average monthly interest fee of 29%, it would take you a year to repay the loan at minimum repayment levels.
That is under ideal circumstances which credit card companies like to sell you on, but most likely you will be taking out a cash advance on a credit card that has a balance and most credit card companies automatically put the repayment of these advances with the higher interest rate at the bottom of your repayment schedule. This means that repayment doesn't actually begin until you have paid off all the charges that were on your credit card balance before you took out the cash advance. So your cash advance is likely to stick around for a very long time at a high interest rate which will very quickly outpace the finance charge you would have paid on a pay day loan.
If you are need of quick cash and would like to apply for a short term pay day loan then I have found the online lender listed below to be very convenient. They will typically deposit your requested funds directly into your checking/savings account within 24 hours of your online application.
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