Money management is always tricky business. No matter how well you plan, there are times when problems pop up and you’re left with no choice but to borrow. In such cases, do payday cash advances really help?
Most steady income families live from paycheck to paycheck. So, when unexpected emergencies arise, quick cash advances seem to be the way out. But, these loans come with high APR charges, just as in credit card loans. Does that mean that such payday cash advances ultimately compromise long term money management and send middle income families into a downward spiral?
It’s true that cash advance loans are at the center of a raging controversy. On the one hand, these loans are hailed because they offer timely assistance. On the other hand, critics condemn these loans as damaging because they throw long term financial planning off balance. The fact is, payday cash advances are designed for emergencies like paying the mortgage or avoiding a bounced check. These loans are meant to be utilized only when there are no alternatives and when payment cannot deferred.
Borrowers must think twice before taking cash advance loans. Typically, these loans charge high APR of more than 1000%. That means, a loan of £100 could well attract an interest of £20 or above. Obviously, the interest paid is higher on bigger amounts. Payday cash advances are meant to be short term loans. Typically, the term of these loans is between 14-30 days. In case the borrower is unable to pay off the full amount with interest within the stipulated time, an extension could be sanctioned by the lender. However, interest rates go up. Some lenders also charge additional fee before they grant an extension.