by Juan Leer

Created on: September 25, 2009

There are many positives and negatives about taking out a cash advance loan. It is not an option that people often consider, but under the right circumstances, it might be a good idea to help you weather a financial storm.

Pros of cash advance loans:

- If you have a bill that you have to pay, then a cash advance loan might be a good idea. For example, if you are going to get evicted, and your only alternative is to pay it with a cash advance loan, then that might be the smart move. Also, cash advance loans do not require you to get a credit check, so it won't hurt your credit score any, leaving your credit score untouched.

- It is good to get quick cash. If you would go to a bank, it could take weeks for you to actually get any type of loan money. However, with a cash advance loan, you can probably get some cash within a half hour.

- If you can't get any short-term cash any other way and you have to have it, then this could be your only way. It is not ideal, but having this option here is better than not having the option for it.

Cons of cash advance loans:

- There tends to be a very high interest rate on cash advance loans. Since it is so easy to get one (no credit check, get it quickly), there generally tends to be a pretty high default rate. Therefore, they have to charge a much higher interest rate than a traditional loan to make up for it.

- It can be hard to pay it back. If you need to get a cash advance loan, you are probably not doing very well financially. Adding this extra bill, which will have the high interest rate, will be tough to pay back the next month. It could put you right back where you started, and leaving you wanting to get another cash advance to pay off the first one. Like credit cards, this can be very dangerous.

- It is never good to incur any personal debt, which is what you are doing with a cash advance loan. All in all, you should only consider one if you are in a one-time emergency where you have to have cash. Otherwise, do your best to stay far away from cash advance loans, because they generally are more trouble than they are worth.

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