What is a cash advance loan?
A cash advance loan is a loan that is taken against a credit but imposing a higher than normal rate of interest. For example, taking a loan of Rs. 500 for a month will charge the interest at 40% interest rate minimum. Usually these loans are taken by middle-class people or lower class people who don’t have enough money to pay their expenses. But these loans are a foe in disguise.
Alternatives to cash advance loans
Although a cash advance loan is a life-saver in situations of extreme financial crunch, they do so only by emptying the pockets of the borrowers without having them to think about the debt-cycle they are going in for. Following are the alternatives that a person can go in for, in case of an absence of a payday loan or to avoid going in for a payday loan:
A cash advance loan is a loan that is taken against a credit but imposing a higher than normal rate of interest. For example, taking a loan of Rs. 500 for a month will charge the interest at 40% interest rate minimum. Usually these loans are taken by middle-class people or lower class people who don’t have enough money to pay their expenses. But these loans are a foe in disguise.
Alternatives to cash advance loans
Although a cash advance loan is a life-saver in situations of extreme financial crunch, they do so only by emptying the pockets of the borrowers without having them to think about the debt-cycle they are going in for. Following are the alternatives that a person can go in for, in case of an absence of a payday loan or to avoid going in for a payday loan:
- Try to solicit a loan from your boss. He may or may not charge an interest rate on the loan and moreover, even if he charges an interest rate, it won’t be as high as that of a cash advance loan.
- Try borrowing money from a friend or relative. These peers don’t charge interest and are almost Eveready to help you out.
- Try going in for a standard or conventional loan. The interest rate charged by these loans is not that high and you don’t need to renew your loan every now and then.
- You can also avail your bank’s overdraft facility. Through this facility you don’t have to pay any interest charges or extra fees to the bank and you can get your expenses paid-off.
- Finally, you can avail a credit card. Instead of going in for a cash advance loan, a credit card charges much lower interest rates and also gives you the leverage of choosing as to how much you can afford to spend on your expenses.
Summary
Therefore, it can be concluded that a cash advance loan is a friend in situations of financial crunch and emergencies/contingencies, but relying on them for every little problem may lead you into a trap of ever-increasing debt which is very hard to get out of.
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