Top 5 Considerations when Looking for a Short-Term Loan or Cash Advance

A cash advance, or short-term loan, is a loan that is taken out for a very short term, usually around a few weeks. When the borrower receives their next paycheck, they will be required to pay the loan back, unless other arrangements have been made.

In most cases, these loans are obtained by people that need to cover an unexpected expense, but won't have the money until their next paycheck. Instead of bouncing checks or over-drafting their bank account, they can obtain one of these loans to avoid expensive late fees and the negative affect to their credit. However, when looking for a cash advance, there are five important things that consumers must keep in mind.

5 Things to Consider when Shopping for a Short-Term Loan or Cash Advance:

1. How much you should borrow.

Before getting a cash advance, it's important to determine how much you will need. The more you borrow, the more you will have to pay back in a few short weeks. Make sure to borrow enough to cover your bills and leave you with a little money to live on, but not so much that it will be difficult to pay back.

2. How much will the loan cost?

Cost should be one of the biggest considerations. While getting a short-term loan is usually cheaper than getting stuck with over-draft fees and late fees, it's important to know exactly how much you can expect to pay.

3. Will the company protect your personal information?

Some payday lenders will sell borrower's personal information to other companies. To ensure that this does not happen, borrowers need to read and understand a company's privacy policy before filling out an application. If a lender isn't committed to protecting the privacy of their customers, it may be best to find one that is.

4. Check what the Better Business Bureau has to say.

Before choosing a lender, borrowers should check with the Better Business Bureau. Checking with the BBB will help borrowers avoid sketchy lenders and find out who they can trust.

5. Understand when the loan must be repaid and potential penalties.

Borrowers will need to determine when the loan must be paid back and what fees they will face if they cannot afford to pay on time. Borrowers may also want to ask whether they can file an extension or what alternative payment plans are available. To get the best short-term loan, borrowers will need to know all of their options.