Payday Loans or Cash Advance
Loans - Useful After a Bankrupt |
By Carrie Reeder |
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Payday loans, also known as cash advance, are a useful tool after
bankruptcy. By keeping current on your bills through a payday
loan, you can rebuild your credit history. The key is to only
use these cash advances for emergencies.
Using Payday
Loans
Faced with a financial emergency, it is better
to apply for a cash advance than skip a bill payment for two
reasons. First, after bankruptcy the best thing you can do to
rebuild credit is to pay your bills on time. If you are 30 days
past due or longer, it will take three years for it to be
removed from your credit history.
The second reason to
use cash advances is to save money on late fees. Often a $30
late fee on an account will be more expensive than the financing
fee of a payday loan. The same is often true with loan payments
and bank charges.
Find The Right Payday Lender
Shop payday lenders just like you would shop for any type of
service. Compare fees and interest rates, as well as, repayment
options and customer service.
Consider looking online for
a payday lender. Many of these online lenders offer instant
approval with no faxing of paperwork required. It is also much
faster to compare rates and fees of online.
Avoid High
Costs
Cash advances are meant to be a short loan
until payday. The high costs of payday loans come when people
put off repaying these loans and the interest fees add up. Plan
to pay back your cash advance on your next payday.
But if
you can't pay your loan back, talk with your payday lender. You
can pay just the interest charge for that period or make only a
partial principal payment. Above all, you don't want to skip a
payment, which will add up fees quickly.
Plan For
Future Emergencies
Once you have gotten through your
current financial emergency with a payday loan, start an
emergency savings fund. By saving as little as $10 a week, you
can have $520 in an account after a years time.
Also
consider applying for a credit card for emergencies after
establishing six months of good credit history.
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