Payday Loans or Advance – What’s the Better Option?

The way we can’t decide whether coffee is a better option or a tea, we cannot tell whether cash advance is more convenient or a payday loan. Like coffee and tea, it depends on our need, our situation and of course on availability. But first, let’s understand the difference between the two:

Payday loans:

Payday loan is a small amount of cash that is lent at high interest rates to the borrowers for a short period of time–probably 2 to 8 weeks–or until their next payday. There are certain requirements that needs o be fulfilled in order to avail the loan.

Cash Advance:

A service provided by banks or credit card issuers that allow the cardholders to withdraw a specific amount of cash. This amount can be withdrawn either from a bank or an Automated Teller Machine. The cardholder will then have to pay this cash advance back with high interest rates.

Pros and Cons:

  1. Availability:

Even though payday loans are quick to be approved, they still are slower than credit cards. The whole process of getting money from credit card takes just few minutes, whereas payday loans might take few hours. Not to mention all the hassle with the documents and application that has to be done. In few rare cases, payday loans also get rejected. Leaving the borrower stranded in emergency situations.

  1. Longevity:

Payday loans are always for a short period of time and they can be paid and done with, within a month. Whereas cash advances have this unfortunate habit of dragging for a long time. The more you drag it the higher interest rate you’ll have to pay.

  1. Temptation:

When you have a gold mine in your hand, it would he difficult not to use it; even if that gold mine is not yours to start with. The same is the case with cash advance. You see a beautiful Dior dress in a shop, you don’t have money but you do have a credit card in your purse, the temptation is just too much to resist and consequences be forgotten, you use it. That Dior dress will end up costing a lot more than it’s worth. However payday loans save the borrowers from this temptation as they are only there when you apply for it rather than being in your hand at all times.

  1. Online scams:

Online scam might have become a part of almost all services; however they seem to happen a lot more for payday loans. Everything is online now, so when people walk into online payday stores they usually get scammed; scammed into giving their personal information and then getting threatened for paying off loans. Cash advances also have online scams but they are few and far in between.

  1. Non-emergency Situation:

A disadvantage of both of these loans is how frequently people use it for non-emergency situations even though they exist for just that.

  1. Unexpected expense:

An advantage of both of these services is their flexibility and conveniences at times of emergency situations. When people have no source of money, payday loans and cash advances could look like an angel. You can read quality payday loans info online, just try to Google it.

Wise thinking and smart borrowing could make payday loans and cash advances one of the best creations on earth but when used unwisely with no reservations then these loans would feel like a bane of life that has no desire of leaving the borrower at peace.

Author: Josphine Smith

Share This Post On