Emergency cash advance loans have become more and more popular among today’s consumers. The economic downturn brought about credit tightening, and major banks are less willing to help people through the difficult times. Even when banks are willing to approve consumers, the process can take far too long for those people with immediate cash needs. This situation has opened the door to cash advances, and many people have found these loans to be convenient and helpful. It is important to note, though, that these loans are not without controversy or bad press. Many pundits in the financial industry have warned against these loans, while many members of the public have found them highly useful.
Recalling the dangers of cash advance loans
Cash advance loans provide same-day cash for people who find themselves in an emergency situation. Still, there are financial talking heads who have written at length about the dangers associated with these loans. The criticism has focused primarily on the high rates that come with cash advances. Though state law limits how much cash advance lenders can charge, those lenders still tend to make 20-percent or more on those loans. A person taking out a $300 loan might pay back $360 a couple of months later. According to the financial press, this can create a downward spiral where people are unable to dig out of a growing hole.
Much of the bad press has centered on those people who use cash advances as a long-term financial solution. Many of these individuals take out these loans with no plan of repaying them in one month. They take out the loans for reasons other than genuine emergencies. Most significantly, they continue to roll over on these loans, racking up the interest charges and penalties that go along with renewing the loans. The press has rightly pointed out that when people use these loans as long-term solutions, they run into serious trouble. Despite this press, an entire group of consumers has found a good use for cash advance loans.
Using cash advances for emergency cash
Cash advance critics warn that people will hurt themselves financially when they pay high interest rates for cash. What these people fail to consider, though, is that many people do not have other options when it comes time to get emergency cash. Missing a payment on a credit card can be much more expensive than taking out a loan. With over the limit fees, late fees, and credit consequences, it can make sense to take out an emergency loan rather than missing a payment date.
In addition, there are some emergencies that just can’t wait. For a person who needs to drive to work, car repairs can be the most important thing. A person with a bad tooth cannot properly function without emergency dental care. Cash advance loans help these people make sense of life, and they help these consumers get back on the right track in a hurry. This can help these people keep their jobs, their homes, and their good credit.
Getting access to quick loans
Most people taking out these loans cannot qualify for personal loans from a bank. Banks have tightened their credit requirements on most loans. In order to qualify for a basic loan, consumers will need a credit score close to 700. In addition, the banks move slowly on loans. If you have a financial emergency, you cannot wait for three weeks to get your cash. This is where cash advances come into play. Though they shouldn’t be used as a long-term solution for financial problems, they can bridge the gap for certain members of the public.
Topic Cash Advance