Cash advance is one of the most advertised and familiar terms in web world. The title is enough to mean what cash advances actually do. It is designed to do instant arrangement of money for those who are on tight budget and need some hard cash to meet their financial commitments till the next paycheck is received. The loan is secured against an agreed contract according to which the pay off period kicks in as soon as the paycheck hits the borrower’s account. The point to note is the lender grants loam without obliging the borrowers to put up any collateral. The entire transaction is made on the basis of some proofs, the most important of which is a steady flow of the borrower’s income.
Payday loan is the other name of cash advance. As per the format of a loan – no matter whether the loan is borrowed from a traditional lender or a private financial institute –it is not justified to term cash advance as a loan. It refers to payment of some advanced cash that is guaranteed by your monthly paycheck. The reason why cash advance is quite a touted talk can be attributed to both its plus and minus factors. The prime positive aspects of cash advances are as follows:
- No requirement of collateral
- No checking of credit background
- Cash tinkles your account within a few days of application submission
- Facility of ‘roll-over’
However, the above ‘points to impress’ can never take away from the fact that cash advance is a costly help in terms of interest payment. The demography shows that majority of the borrowers are from middle class background and so high interest puts a burden on these people with lower income ceiling. They often fail to make scheduled pay-off and have no way but to go for ‘roll-over’ option. This feature actually refers to ‘loan renewal’ program which is – truth must be told – a dangerous proposition. Instant loans like cash advance are really a good option when you need a healthy sum to manage your household expenses. But you can explore its benefits in full only if you take care to meet the timely payment obligation.
The rapid growth of instant cash industry reflects the very fact that these days, people have growing appetite for such lending structure. Traditional loan is made accessible to those with high credit ranking though one needs to wait for weeks to receive funding. It is also an issue that you will not get loan if no collateral is placed. So, the prospective borrowers are going with instant loans options, of which cash advances is the first choice.
Can Unemployed People Get Quick Cash Loans?
The financial strain of unemployment is enough to deal with. There are options available to obtain funds even when there is little or no income coming into the home. The information below will help to understand how to get quick cash for unemployed people. In some cases, these options are the best opportunity available to keep a roof over your head.
Visit a Pawn Shop
Visiting a pawn shop may just be the easiest option for unemployed persons to obtain cash quickly. Consumers can take items of value to a pawn shop and obtain cash on a loan, or pawn, for a period of 90 – 120 days. It is important to understand that the amount paid for items is not what the value will be when the items are pawned. A pawn shop can only loan for the amount the item is actually worth. This means that a 14k diamond ring purchased for $2,000 may only be able to obtain a loan for $300, as an example. If the loan goes unpaid, the items are lost.
Use a Co-Signer
In some cases, a personal loan may be able to be obtained with the use of a co-signer. This will help you to get the funds needed but makes the co-signer responsible for repayment if you default on the loan terms. Of course, this can turn ugly quickly so it is important to ensure that you can repay the amount being borrowed. The loan amount is based upon credit and the ability to repay the loan.
Borrow Against Life Insurance
Most life insurance policies offer policy holders the ability to borrow against the coverage. This does have to be repaid but the terms are much more lenient. This does temporarily reduce the value of the insurance policy until the borrowed amount is paid back in full. This is an interest bearing type of loan which means that you will repay more than what was borrowed.
Even unemployed persons have the ability to obtain loans to take care of household expenses and personal needs. In some cases, a few hoops may have to be jumped through but if you have good credit, collateral and a strong co-signer, obtaining a loan should not be a problem. Pawn shops are a good option if you have items that you can go without for a period of time or can stand to lose should you be unable to repay the loan given.
Other Options to Payday Loans
If you are struggling financially, payday loans are not the only option that you have available to you. In fact, there are lots of other financial options and many of them are more effective than a payday loan. You will pay less interest, you will have more flexible repayment terms, and your finances will be easier to manage. Below, you will find the top 4 alternatives to payday loans and reasons why you should consider them as a financing option.
1 – Traditional bank loans
While a traditional bank loan may require an extensive application process, bank loans are far more reliable than payday loans. Of course, they will need to run a credit check and verify your employment, but as long as you hold up strong during the application, it should only take a few minutes to receive an approval. Traditional bank loans offer some of the lowest interest rates you can find. In fact, after the recession, interest rates became lower than they have ever been in the past. Now is the perfect time to take out a loan if you need financial help.
2 – Credit cards
Using a credit card and taking out cash or even paying off your debt directly with the card is generally going to be a better idea than using a payday loan. Short-term loans have very significant interest rates and it’s likely to be a lot higher than your credit card. Most credit cards today have interest between 5-20% which is substantially lower than the interest for a payday loan. If you take out cash with your card, the bank may charge you an additional fee so you will have to take this into account as well. However, in general terms, credit cards are a reliable alternative to payday loans.
3 – Credit union loans
Credit unions are often non-profit organizations and they can provide you with substantially lower interest than a traditional bank will. Credit unions can be found all across the nation and if you are looking for an alternative to payday loans, they are a reliable choice. Credit unions are almost always located in the community that they serve, so there should be a facility nearby where you can go speak with someone. Keep in mind, credit unions sometimes have limits on the amount that you can borrow and it’s usually about $500 per month. You will have to repay any money that you borrow on a monthly basis.
4 – Negotiate payment plans with creditors
If you owe money to specific businesses, the best way to avoid taking out a payday loan is to negotiate a credit check with the creditors. Most businesses will be more than willing to work with you as long as you make an effort to show that you are actively trying to pay off what you owe. The best plan of action is to call up each company and speak with someone about your account. Let them know how much money you can pay immediately and how much you can afford monthly.
