Archive September 2008
Cash Advance on Paycheck - Can You Justify the Higher Rate of Interest?
by techready (09/20/2008 - 07:39)
Despite the popularity of cash advance on paycheck loans in the market, some people still hesitate to go for them because of the high rate of interest charged by the lenders. Much has been already spoken about it, and it has been a matter of heated debate. However, if you pay close attention to the benefits of these short-term loans, you will find that repaying the amount at a little higher rate is not that bad. Here, it is very important for you to understand that they only talk about the high "rates" not the "actual amount" of interest that you have to pay. There lies the difference which you have to understand.
The Actual Amount Of Interest Vs The High Rate
Most cash advance on paycheck lenders will charge you a three-figure rate of interest that can be as much as a whopping 100-200%. The figure really looks quite shocking. However, let's figure out that even at that rate, how much amount you will actually be paying as interest on these loans. Suppose, you have to meet some urgent medical expenses and you are short of cash. You borrow a cash advance on paycheck of $600 for one week at the interest rate of 150%. Please note that the rate is applicable on a per annum basis. Therefore, when you calculate the actual amount of interest payable for a week, it amounts to only $17. There, you can see it for your self. Is the deal that bad? Considering the urgency of the financial requirement, it does not sound a bad deal to borrow $600 for a week with $17 as interest.
You Can Still get A Much better Deal
In fact, if you are ready to spend some time on doing a bit of research and comparison-shopping, you can easily find a lender who will readily offer you cash advance on paycheck at a much lower rate of interest.
Overall, when you look at the bigger picture, the higher rate of interest charged by cash advance on paycheck sounds completely justifiable. However, you obviously do not have to go with lenders that charge unreasonably high rates of interest, such as 300% - 500%. A bit of research and a smart approach towards these loans will help you get a good deal.
The Actual Amount Of Interest Vs The High Rate
Most cash advance on paycheck lenders will charge you a three-figure rate of interest that can be as much as a whopping 100-200%. The figure really looks quite shocking. However, let's figure out that even at that rate, how much amount you will actually be paying as interest on these loans. Suppose, you have to meet some urgent medical expenses and you are short of cash. You borrow a cash advance on paycheck of $600 for one week at the interest rate of 150%. Please note that the rate is applicable on a per annum basis. Therefore, when you calculate the actual amount of interest payable for a week, it amounts to only $17. There, you can see it for your self. Is the deal that bad? Considering the urgency of the financial requirement, it does not sound a bad deal to borrow $600 for a week with $17 as interest.
You Can Still get A Much better Deal
In fact, if you are ready to spend some time on doing a bit of research and comparison-shopping, you can easily find a lender who will readily offer you cash advance on paycheck at a much lower rate of interest.
Overall, when you look at the bigger picture, the higher rate of interest charged by cash advance on paycheck sounds completely justifiable. However, you obviously do not have to go with lenders that charge unreasonably high rates of interest, such as 300% - 500%. A bit of research and a smart approach towards these loans will help you get a good deal.
Source: http://EzineArticles.com/?expert=Al_Falaq_Arsendatama
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