Payday Cash Advance Info

Payday loans or cash advances can be used for all kinds of things. As the name suggests, payday loans are often used to keep people going and make ends meet until the next pay check comes in. So why do people need a separate loan for this? Why not just put it on the credit card and do we really need to borrow money just to take us through to the next payday? Well, in some cases yes. Lots of people with debt have credit cards and loan payments that come out each month and if these are missed or not services regularly it could cost you quite a bit in late charges and fees. Not to mention the 5 year marks on your credit rating. So yes, servicing a loan with a loan is sometimes a better and less costly option than just doing nothing and becoming overdrawn and missing your loan or credit card payment all together.

Cash advances however do tend to be high in interest due to the associated risk and the term of the loan only being short. The lenders need to make a bit of money on their offering afterall. With this in mind, only use a payday loan when you really need it. Don’t do it just to fund luxuries.

Most people think that the easiest way to get debt free is to pay off as much money as they can each month with a view of clearing the entire debt. Whilst this is indeed true, the more you pay, the less you owe, it is not the only debt management technique that can be used to get out of debt. The key to becoming debt free is paying the most of your actual debt month to month, not just the total amount you’re paying.

That might sound confusing, but imagine you have 2 credit cards, each of them have a maxed out limit of £4000. The typical month to month interest rates on these cards will cost you payments of around £150 each, or £300 total. Now, of that £300, you’re only paying around £50 off your £8,000 debt – so it’s costing you £300 to clear £50 of debt – which is obviously not good debt management. In this case, you could take out an £8,000 loan to pay these off, if you structured your payments at £300 per month, the same as you were paying anyway, you could be paying £250 off your actual debt and only £50 interest, in most cases even less than that. So you’re paying the same amount, but you’re clearing a lot more off the actual money owed.