Online Loans with Monthly Payments vs. Cash Advances: What You Need to Know
If you need a cash advance to cover unexpected expenses, you may be comparing online loans with monthly payments and cash advances. What’s the difference, and what’s a better option for you? Let’s take a look at the basics of each type of loan now!
WHAT IS AN ONLINE LOAN WITH MONTHLY PAYMENTS?
An online loan with monthly payments is often called “online installment loans” or “personal loans online.” These terms all mean the same thing.
An online loan with monthly payments is a set sum of money that you borrow from a lender for a specified period of time, with a set interest rate. For example, you could borrow $3,000 for 12 months at a 20% interest rate.
Then, each month, you will repay a portion of the original loan amount, as well as the interest for your loan. Using the above numbers, you’d pay $278/month for 12 months. Once you’ve reached 12 months, your loan will be repaid.
Online loans with monthly payments are a good option if you need a large sum of money and have good credit. Usually, you cannot get this type of loan if you have a bad credit score.
WHAT IS A CASH ADVANCE?
A cash advance also often called a “payday loan” is a short-term loan that’s intended to help you cover your expenses until your next payday.
You borrow a set amount of money – say, $500 – and then on your next payday, you will repay this sum, plus any additional fees from the payday loan company.
Cash advances are more expensive, overall, compared to personal loans. However, it’s much easier to get a cash advance with bad credit, as most payday lenders do not require a traditional credit check. The process of getting a cash advance is also usually faster and more convenient, compared to online loans with monthly installments.
WHAT’S BETTER FOR ME – ONLINE LOANS WITH MONTHLY PAYMENTS OR CASH ADVANCES?
Mostly, this depends on what you need the money for. Online loans with monthly payments are often better for meeting your long-term financial goals.
For example, let’s say you have a credit card with a $5,000 balance and a 30% interest rate. If you could take out an online loan with monthly payments for $5,000 with a 20% interest rate, you could pay off that credit card – and save on your payments.
On the other hand, if you just need a few hundred dollars to cover an emergency expense like a car repair or unexpected medical bill, it’s usually much faster and easier to get a cash advance from a company like Mypaydayloan.com.
UNDERSTAND WHAT LOAN OPTION MAY BE RIGHT FOR YOU!
Both online loans with monthly payments and cash advances from Mypaydayloan.com can be useful financial tools. So, make sure you understand the differences between each one – and which type of loan may be right for your situation!