Applying For A Cash Advance Online

A man is applying for a cash advance online on his laptop
Do Cheap Payday Loans Exist?
Part 1 Cash Advance – An Overview
Part 2 Are There Low Interest Payday Loans?
Part 3 Applying For A Cash Advance Online

Even if you live in a state where the maximum interest rate is capped, a payday loan can still be an expensive nightmare. But, with the introduction of more online payday lenders, there is soon going to be more choice regarding a cash advance online. In this article we’ll be looking at:

  • How to obtain cash online
  • Annual percentage rates – interest
  • How to best make payday loan repayments
  • Avoiding serial borrowing

Many of the new lenders in the payday industry are offering loans that can run for up to six months and they are charging lower interest rates. Most people are aware that payday loans charge higher rates of interest than credit cards and sometimes they appear to be the only choice.

The new installment loans offered by online lenders might be a more viable option. The loans cost less and instead of wiping out your entire monthly paycheck, you can spread out the cost of the loan.

Quick and easy cash online

Taking a payday loan is quick and easy. And, online lenders make it even easier than going down to the store to get your money. Cash is sent directly to your bank account and when the time comes to repay the loan, the lender withdraws the total amount due. This access to fast cash is now available through applications on smartphones as well as laptops and this easy route to borrowing can be dangerous. Never apply for a loan when you are out drinking. This is a short cut to disaster that could see you taking out an unaffordable loan.

A woman is shown applying for a loan on a smartphone

Compare offers of online loans by using a money comparison website where you can clearly see the rates and financing fees. One fact to bear in mind is that payday lenders charge a higher interest rate per month than credit cards do for a year.

Interest – Annual percentage rates

While a comparison website will quote you the relevant APR for loans, if you see numbers approaching 1000%, it is really meaningless. An APR must include all the fees and charges relating to the loan. But, by definition a payday loan is only going to run for a few days or even a month so it is more important to look at the total cost of borrowing your required sum.

Making your payday loan repayment

Be honest with yourself. If you are unable to afford the full repayment when the date becomes due, the loan is going to be unaffordable. No matter how desperate you are, there are always alternatives so seek help if your financial problems are too much to handle.

Payday loans have higher interest rates per month than credit cards do yearly

Even if a lender offers a longer repayment period, it is important to consider the total costs and really think about what the future holds. The longer the term of a loan, the more costly it is going to be.

Serial borrowing

Another important point to think about is your relationship with the lender. If you have already had a payday loan and successfully paid it off, the lender is liable to come back to you offering a higher amount.

If you are unable to afford the full repayment when the date becomes due, the loan is going to be unaffordable.

You will have become a ‘good’ customer and have made the company money so if you are bombarded with offers do not be tempted to take out a bigger loan that is going to cost a lot in charges.

Are payday lenders all bad?

The regulations for payday loans are different within each state where they are legal. These rules do prevent some of the worst lending practices but it depends on where you live how much protection you will get against high interest rates and finance fees.

A lender is holding out dollar bills

However, lenders are required to be licensed by the official regulator and they are a better option than going to an illegal lender or loan shark.

The CFPB is a good source of assistance for anyone who has been trapped by an illegal lender and there is some good information about loan sharks and scams in another article in this series.

Summarizing affordable payday loans

If they are used as intended, as a fix for short term monetary problems, a payday loan can be affordable. Consider all the costs before signing up to a loan and if you have doubts about your ability to make the full repayment on time, look elsewhere for help.

Do Cheap Payday Loans Exist?
Part 1 Cash Advance – An Overview
Part 2 Are There Low Interest Payday Loans?
Part 3 Applying For A Cash Advance Online

About the author

Mark Larsen

Mark Larsen has worked in the finance industry for over 20 years. Over the course of his career, Mark has amassed experience in personal finance and especially short-term lending. He shares his valuable insights on onlinecreditusa.com