If your budget is tight, making ends meet can be an uphill battle. If there’s anything that can make this struggle even more difficult, it’s an unexpected expense.
Maybe your cat is swallowing a rubber band and needs emergency vet care. Or maybe your car refuses to go over 40 MPH, so an unexpected trip to the machine shop is in store.
A sick animal or a broken down car requires immediate repair. Like many emergencies, these are non-negotiable, urgent expenses that you need to take care of right now, even if you don’t have cash or credit.
If you run out of money before payday, a payday cash advance seems like the perfect solution. But is it?
What are payday cash advances?
The financial experts of Silver key describe payday cash advances as short-term, low-value loans. As the name suggests, these loans advance you funds until your next payday.
Advances come from various banks and direct online lenders, but they all have these three things in common:
- Funds: Most cash advances are around $ 500 or less, making them ideal for minor repairs or medical expenses, but not for big purchases or complicated renovations.
- Terms: To be repaid immediately on your next payday, most cash advances have a duration of two weeks.
- Cost: Payday cash advances are designed to help people with bad credit, so they tend to have higher rates and fees. The typical payday loan costs $ 15-20 for every $ 100 you borrow, which translates to a three-digit APR.
This high cost may be justifiable in an emergency, but the short turnaround time of payday advance exacerbates how unaffordable they can be on a tight budget.
Fortunately, there are other options, even if you have bad credit.
Borrow from a friend
This can be an option if you have a good relationship with a friend, but it requires knowing someone who is more in control of their finances.
If a loved one is ready to help you in an emergency, make sure you treat it like a legitimate personal loan, setting clear expectations about when you need to pay back what they lend.
Take out an installment loan for bad credit
Money can ruin even the best relationships, so it makes sense that you don’t want to ask your friends about this. Fortunately, there are online bad credit installment loans that are available for emergencies. Although they may have similar high interest rates due to your low score, they have a longer term to offset their costs.
As online loans with monthly payments, you can have weeks, months, or even years to pay off what you owe. This will break down your loan into multiple installments, so you don’t have to hoard the money in one lump sum like a payday cash advance.
Use your credit card or line of credit
This option only works if you still have space on your card. You can request a cash advance through this account, usually at an interest rate similar to your usual charges. However, be sure to read the fine print. Most credit card companies will charge an additional fee for getting a cash advance this way.
If you don’t have any available credit on that account, you can search for lines of credit online as an alternative.
There are alternatives to payday advances, so take the time to research how they differ before borrowing a single penny. The time you spend comparing rates and terms can help you find a better solution to your financial problem.