Difference between Payday Loans and Cash Advances

Difference between Payday Loans and Cash Advances

If you are considering a short term personal loan then you can consider a payday loan and cash advances.

Payday loans allows you to take small amounts that need to be paid back in full come the next payday.

There are also personal loans that can be larger and the repayments can be stretched over a longer period of time.

SureSwipe are credit card merchant providers that you can talk to about cash advances.

The main short term loan solutions are payday loans and cash advances.

 

Payday Loans

A payday loan is also referred to payday advances and online personal loans are unsecured loans. This means that there is no collateral and there is usually no credit checks required for approval.

A payday loan is approved based on your income and they are designed so that they are paid back on the specific date that you receive your next pay check. Generally they are paid back in one repayment which is the full amount of the loan plus the interest on the loan.

You will also need a bank account that is in good standing in order for an online payday loan. This is because the loan will be transferred straight to your account and your repayment will be deducted electronically on the due date.

Your income will determine that maximum payday loan that you are eligible for. There are lenders that will decline your loan if they find that you already have unpaid loan with other lenders. If you are in bankruptcy or have ever filed for bankruptcy then your loan can also be denied.

Cash Advances

There are generally two types of cash advances. The first is where the term cash advance is used interchangeably with payday loan as it refers to an advance on your pay check.

This type of cash advance has the same structure as a payday loan in that the maximum that the loan can be will depend on your income. These cash advances are expected to be paid back on the next payday or within a month of taking the loan.

The other type of cash advance is those that are based on a credit card or a line of credit. The credit limit that you have available on a credit card will determine the amount that you can loan.

A credit card cash advance is generally treated like a purchase that is made with a credit card. This means that the repayment terms will follow the policies of the credit card.

A cash advance may offer or may not offer you a better deal than a payday loan as it will depend on your credit rating and the terms of your credit contract. There are credit card companies that will charge a higher interest rate on a cash advance.

Unsecured loans in general will have a much higher interest rate then a secured loan. The lender for an unsecured loan has a much higher risk of not being repaid.

When it comes to payday loans and cash advances it is hard to say which the best for a short term loan is.

You need to look at how much you will need to borrow and the interest rate that is attached.

If you need to borrow more then what a payday loan site is offering then a cash advance could be the better option. It is vital that you look at what you can afford, so you can ensure that you can pay it back.