A cash advance loan – money you borrow from a payday loan provider, based on your next paycheck – can be either a very useful or potentially destructive tool. Millions of people who work hard at their jobs use cash advances in order to cover unplanned, emergency costs that exceed their current checking account balances. Done right, a cash advance can be a lifesaver.
So where can a cash advance loan be a bad idea? Simply, if the borrower fails to pay it back quickly. These are designed for emergencies, and once the emergency is past the loan should be paid off. There are three ways in which the borrower can make sure they effectively pay off the cash advance in a timely fashion:
If you budget for reducing costs in the next month. In other words, you are getting the money you would use two or three weeks from now. That means you have to reduce your expenses then. Ask yourself, what expenses can be cut out next week and next month?
If your loan amount is manageable within your payscale. Your cash loan should be an amount that is reasonably within your ability to repay it. Most lenders restrict the loan to an amount less than what one paycheck would be, so in effect this is done for you. For good reason.
If you reduce expenses by a commensurate amount. One cash advance loan is not going to solve all current and future economic challenges. If you run consistently behind in expenses relative to your payscale, there is but one solution: cut back. (You could also get a second job, but in the current economic conditions that may not be an option.)
So if you decide to proceed with getting a cash advance loan – which may be the most responsible thing you could do – you are wise to plan a quick payoff. It will reduce the overall costs of the loan in fees, interest and penalties.
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