It is never fun being behind on paying your bills. With more and more people living paycheck to paycheck, we often get the question, “what happens if I need money in a pinch?” That question can spur many different responses based upon your individual financial situation, but what happens if you have to look for some sort of cash advance to hold you over until the next paycheck. Obviously, you want to exhaust all of your options before you go for the cash advance. We don’t recommend cashing out of retirement plans like your 401(k) as many people will when they look for cash as the taxes, penalties, and loss of compounded interest on your money could be detrimental to your long term retirement plans. I need a Cash Advance – So, what to do?
There are many companies that offer these types of programs to get a small loan between $100 and $1,500. For example, companies like CashNetUSA are in the business of providing these Short term loans with a quick and easy on line or over the phone process. Your credit score may not matter depending on the size of the loan. There are many different companies on the internet, so do your due diligence and here are some traps to watch out for if you go down the path of getting a short term cash advance loan.
1. Out Of Country Lenders – I’m not talking about the e-mail scams. Loan operators from places outside of the country such as Panama and Costa Rica may charge substantially higher fees. Make sure that you have a phone number and an address in the United States that you can verify before you sign any paperwork.
2. Read The Fine Print- Make sure that you read every line of the fine print before you sign an application. There may be boxes on the application that expect you to opt out vs. opt in. These can be for additional promotional offers to discount clubs, shopping offers, or catalogs. Make sure that the only thing you are applying for is the cash advance loan.
3. Fees– Ask what the up front fees are if any at all. You should try to minimize your up front costs, and be certain that you understand the terms of the overall rate. Ask if it is a variable rate or a fixed rate, and what the interest rate is tied to if it is variable. You need to understand what happens if your payments are late as well.
4. Early Repayment– You want to make sure that there are no pre-payment penalties if you pay early. Some lenders will not let you repay earlier so they can collect their interest, or they charge you a significant penalty to repay the loan. This is a key question to be asking before you take the Payday loans .
If you are constantly falling behind on your bills, it may be time to visit getting a financial plan into place. Just like any good business, you need to see if you have a revenue problem, expense problem, or some of both. Take action now, so your household is always on ‘borrowed’ money time.
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Ted Jenkin, CFP®, AAMS®, AWMA®, CRPC®, CMFC®, CRPS®
Co-CEO and Founder oXYGen Financial, Inc.
Request a FREE consultation: www.oxygenfinancial.net
oXYGen Financial, Inc. co-CEO Ted Jenkin is one of the foremost knowledgeable professionals in giving financial advice to the X and Y Generation.
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