Why Choose a Payday Loan for a Quick Cash Loan?
If you need fast cash, unsecured loans can make sense. It's often possible to borrow more with a payday loan than you could charge on a credit card. In fact, it's possible to borrow amounts similar to a home equity loan. With a home equity loan or a HELOC, though, you need to own a home with sufficient equity to secure the loan. Unsecured loans offer the cash flow even to those who don't own homes, or whose homes don't have enough equity. There are other reasons to choose an unsecured payday loan:
- Lower rate than many credit cards, and a much lower rate than a payday loan. Payday loan rates can slow your ability to repay. Many payday loans have attractive rates that make repayment easier.
- You don't have to worry about your house being on the line. A HELOC can jeopardize your biggest asset, but unsecured loans don't put any of your valuables at risk.
- Unsecured loans can be discharged under Chapter 7 bankruptcy, which is not an option with secured loans. If you experience a financial catastrophe later, your payday loan won't hinder you from starting over.
- Access cash without dipping into retirement funds. Using your retirement account can result in penalties and put your future at risk. Getting a loan against your retirement account can reduce your penalties, but that route comes with its own risk: if you lose your job, you might have to repay your retirement account loan in full.
- Regular, manageable payments that you can budget. High-interest credit cards have variable rates that can increase your payment amount. A fixed-rate unsecured loan ensures that you know what to expect each month.
When you need cash within the next day or two to handle unexpected expenses, there's no reason to draw on an existing HELOC or pay outrageous interest rates with a payday loan. Instead, use the Internet to compare unsecured loans from a variety sources, and get the money you need at a reasonable rate and without endangering your most valuable assets.
How to Find the Payday Loan
No matter where you choose to apply for a payday loan, the process to find the best option is the same. Compare the following criteria between each loan offer you receive to find the best deal:
- Interest rate or APR – Compare interest rates to find the loan with the lowest ongoing interest charges.
- Loan fees – Compare loan fees across all loan offers you consider. Obviously, the best loan offer will come with no fees or very little out-of-pocket cost.
- Loan length – Find out how long you'll need to make monthly payments until your loan is paid off.
- Monthly payment – Use a loan calculator to figure out your monthly payment. Make sure to choose a loan with a monthly payment you can afford.
Payday loan for your needs will come with the best combination of the details above. Ideally, you'll score a payday loan with a competitive interest rate, no fees to get started, and a monthly payment that works with your budget. Make sure to compare each loan in its entirety to find the best loan package over all.
Payday Loans to Watch Out For
In addition to loans from online lenders and traditional banks or credit unions, you'll find an array of lending options that are far less fair. For example, it's possible to take out a payday loan that relies on your future paycheck for repayment. The problem here is that many payday loans charge interest rates upwards of 300%!
The same can be true for high-interest installment loans and even title loans, which use the title of your car for collateral. Make sure you compare the interest rates and fees for these loans before you apply. No matter how bad you need the money, the last thing you want is a loan with an excessively high interest rate.