Expert Author Holly Petherbridge
A direct online cash advance is a fast way to obtain much needed money. It is a convenient emergency cash option when other avenues are not accessible. Getting a loan is pretty easy as long as you meet the lender's criteria. The tough side of these loans is when the due date comes. The average term of a short-term loan averages two weeks. Borrowers often have problems with paying the expected full amount of the loan plus fees when their next paycheck is deposited. Oftentimes, that money is needed to pay rent or buy food or gas in order to keep the household functioning. How does a borrower keep from settling into a cycle of short-term loan debt?
1. Pay your loan in full
The best way to take care of the bill stemming from online cash advance lenders is to pay it all off in full on the original due date. Lenders will combine the interest charges along with the loan balance for that one scheduled payoff date. Do what you can to muster up the extra cash in the short time period. Whether you hold a garage sale, cut back on groceries or entertainment expenses limiting cash flow will help gather extra money get rid of the loan.
2. Buy down your loan
When you cannot afford to make the full payoff price, the next best option is to pay as much as you can. The online cash advance lender will expect a borrower to pay a minimum cost otherwise known as the fees. A buy down interprets to making a payment to cover the cost of the fees plus extra. Make the biggest buy down possible. The less principle attached to the loan, the less interest charge. Some companies will set up automatic buy downs to include the cost of the fees plus however much extra the borrower wants. This automatic payment will shrink as the principle lowers. For those who struggle to get rid of the short-term loan, it is a much better option than trying to apply for a new loan to pay for an old, the dreaded "cycle of debt."
3. Rollovers/Extensions
Be careful if you are going to choose this option. It will keep you from having to take out a new loan, but it also does nothing to lower your payment. It does keep you in good standing with the lender while you work to gather the funds needed to pay off or buy down your loan. Keep your loan out of default so this transaction doesn't end up on your credit history once a collections agent gets a hold of it. Be aware that this option is not available in all states. Some states have regulated this option and its residents may not use it.
It is important to understand your state's regulations, if any, towards short-term loans. It is also good practice to call and talk to a lender before filling out the application. If you are dealing with a new company, you may not be aware of all the fees involved. It is important to work with a lender who does not charge application fees as well as charges lower interest rates on the loan. Gathering this type of information is important to keep your loan transaction a safe one as well as keeping the total cost down.
It is always good to understand the terms and conditions of any lender prior to signing for the loan. Take the time to review the contract, the amount of the loan as well as the total amount due in fees. Make sure the lender has calculated the money correctly as well as only processed the amount you requested. Some predatory lenders may qualify a borrower for a larger amount. Just because you qualify for a larger amount, it doesn't make it a good decision to take out the extra. Your total loan amount will be charged interest. Make your fast cash advance loan as simple as possible by taking out the minimum amount necessary and pay it off as fast as you can.
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