In the earlier days when debt was still new and banks were the safe option while individual lenders were the other option that were mostly unregulated, borrowing was quite a risk. It wasn’t a risk just for the borrower, but also for the lender. Fast forward to today’s time, and a lot of regulations and close oversight have made lending much safer and hence something that a large number of people in the US depend upon. Here, we take a look at cash advances – the short term loan products offered by direct lenders (non-bank). More specifically, we shall be discussing how one could take advantage of the online cash advance loans – those that such lenders offer through a completely online process, which is aimed at convenience, quickness and much lesser filtration, which leads to a relatively expensive deal for a borrower. But here’s the catch – the terms are so short that the final absolute amount of money that one pays, may not be too much.
How to Keep Costs Low?
Let’s start with the basics – cost. This is what makes a loan less attractive versus spending savings and this is also what mostly makes one of two similar loans more attractive than the other. There are two ways to look at a loan’s cost – one is to understand what percentage of interest you would be charged and the other is to understand how much you will pay back over time, for the amount that you borrow. The former is what is indicated best by APR and the latter is the absolute cost of the loan.
APR
Increasingly being touted as the right way of measuring a loan’s expense, APR is how much simple interest you pay on the loan amount per year. While this is a valid way to compare loans of similar tenure and similar processes, it is important to understand that loans with significantly shorter terms would tend to have exponentially high APRs, which however might not cost the borrower much in totality. For example, if a loan is being taken at 10% APR for 100 days, it would cost the same as one at 100% APR for 10 days. Also, a loan being taken at 20% APR for 100 days, would cost twice as much as one taken at 100% APR for 10 days.
The trend for the debt market is simple. Where there is higher risk, the loan lender shall expect higher returns. APRs of cash advances that are available easily to almost everyone (since the credit check is mostly not mandatory) with no complex paperwork or collateral, are high for this primary reason – the lender is taking a bigger risk while choosing to make the decision to lend accommodating these terms.
Absolute Cost
When taking a cash advance loan, it is very essential to understand the absolute cost of your loan. Fair and trustworthy loan lenders will disclose this clearly on websites in appropriate sections and also understanding one’s contract would help understand this too. It is simply the amount that a borrower pays in excess while paying back the loan, over the amount that they borrow.
At a much higher APR, the absolute cost of a very short term loan can still be lower than a low APR loan with a long term. So essentially, it comes down to the borrower’s needs, situation and financial health, to decide when a cash advance is right.
To keep costs low while taking a cash advance, it is essential to choose the best deal and then stick to the payback schedule as very short term loans given by lenders at high risk are bound to be quite expensive in case of delays in payback.
Why Choose Online?
When a non-bank direct lender loan is what you need, you shall be looking for other lending entities. Lenders that deal with higher risk loans are limited in number and it would be harder to find the right, reliable solution. Thanks to the internet, there are bloggers, reviewers, and a ton of other references available to find out about and estimate the performance and reliability lenders who deal online. This is not the case with lenders who operate from pawn shops whose services are less exposed and reviewed. While this makes the online direct lenders the right choice, it is not the only benefit you get when dealing with online lenders.
Other distinct advantages include:
Helpful in emergencies: rather than running around looking for loans, the person in need can apply for money online and focus on addressing the actual emergency better
More competition: always leads to better deals for customers over time
No paperwork: most such loans would require no paperwork – everything is done through scanned documents and e-signatures
Accessible wherever the internet is: An internet connection on your smartphone, laptop or desktop is all you need
EzPaydayCash is an example of a trusted lender and on their website, their most in-demand services are their online payday loans from direct lender.
When Not to Take a Cash Advance?
The non-bank direct lender short term cash advance loans we refer to, are typically aimed at serving as an option to borrow money when at least one of these are applicable:
The borrower suffers from poor credit scores
The borrower is in a hurry for a small loan
The borrower needs a very short term loan
The borrower has been rejected loans from other sources
The borrower is only able to borrow online and that is making less expensive loans unavailable
If none of these describe your situation, it is advisable to look at other options of loans before closing any deal.
How to Use Online Cash Advances Wisely to Your Advantage?
Loans of different types are designed to be beneficial for different people in different needs. In the debt market, there doesn’t exist a one-size-fits-all product and this is a very important thing for borrowers to understand. Having read this article until here, one would know whom the cash advances are designed for. A few cautions and a little accurate understanding can make this otherwise risky form of borrowing, beneficial in some situations. Here are six tips that can make the loan serve you to your advantage:
Research to see if an option with a lower absolute cost is available to you and suits your needs
Borrow only as much as you need, only when you need it
Be prepared to pay back the amount as per the schedule – delays in shorter term loans are typically more expensive
Read your agreement carefully so you understand the loan well
If you can pay them back on time, borrowing for the shortest amount of time can save money in many cases. Understanding the terms and calculations or using tools for that, can be helpful here
Borrow to improve your credit score if needed and then pay back on time. Eventually more loans with lower interest rates might be available to you.
Conclusion
Online cash advances from direct lenders are useful and hence in great demand. However, understanding the loan helps one understand when and how it could be advantageous to choose such a loan. Not having such an understanding could cost the borrower money.
If you’re looking for the best deals on short term non-bank cash loans that are available to borrowers irrespective of credit history and with instant responses, we hence suggest an online cash advance from direct lenders only and EzPaydayCash is one of the frequently recommended options offering such services.