Thursday, February 18, 2010

Online Paycheck Advance - How to Avoid Financial Default

online paycheck advance
Online paycheck advances are offered to us as fast and easy-to-get loans, and they definitely are. But still, many people argue these loans to be rather dangerous, as they might cause serious debts and as a result lead to financial problems. To a certain extent this statement is true, especially for those who are not careful enough about keeping track of their money and debts. An online paycheck advance may save you a lot of time and even some money, if you have a financial emergency, but it requires a special attitude from you.

Do not feed the monster: do not roll your cash advance loan over

Paycheck advances are short-term personal loans, and they are meant to be fast to take, as well as fast to be given back. When offering you an online cash advance with no credit history check and no special obligations on your side, the bank takes a risk. And this is why to protect themselves from loss, banks need to have high interest rates on these loans. And due to the interest rates like that, an online paycheck advance of $300 may turn out to be a $1000 debt of yours.
How can that be? Go ahead and see. Let us assume, you take a $300 online cash advance. With such a loan the interest payment for two weeks will be about $40. But if, when it comes to a due date, you happen to not be able to repay your loan, you may pay only $40 and roll your loan over until the next payday. In such a way, if you keep doing this for a year, you will end up having paid $1040.

This is a good point to think about when you take your online cash advance loan, though it would be a mistake to say that this is a reason not to take one at all. Paycheck advance loans are really helpful, and can be used to avoid many financial troubles, but what you always need to remember about is that you should use it for a really short time. When applying for your online paycheck advance you should already know when and how you will find the money to pay it back.

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