Getting a Cash Advance, Payday Loan, or Tax Refund Loan

Getting a Cash Advance, Payday Loan, or Tax Refund Loan - You have experienced financial problems in the past and need to borrow money, your choice may be very limited. If you have bad credit, all your regular bank loans will only be available at a very high interest rate. If your credit is very bad, you may not be eligible to get a traditional bank loan at all. Fortunately, there are still a few options that may be open to you, though some may carry substantial risks, such as requiring you to place your personal assets as collateral. Before considering the following loan options, consider what caused your credit poor and whether your situation has changed so you now have a greater capacity to repay the loan. You certainly do not want to do anything that will further compromise your financial and credit situation. You can get free counseling by going to credit.org to help you understand your options and determine how best to move forward with new debt may or may not be it.

Find out if you have other options. The following options can be very costly and / or risky. Most experts consider this to be a predatory borrowing practice and do not recommend it. Information about this is included here to give the reader a better understanding of how they work and the risks that accompany it. Think seriously before considering this option and discuss with counselor for free by going to Credit.org.

Get refund anticipation loan (RAL). If you have not succeeded with another method and expect a refund for your federal income tax, you can get a loan based on the anticipated return. Contact a large tax preparation company to get a refund anticipation fund. This loan is no longer offered by the bank.

• Refund anticipated loan using anticipated tax refund as collateral. They usually come with very high interest rates, in addition to other possible costs. 
• RALs are usually available starting in January at the end of the fiscal year, up to April when taxes are due. 
• If you are filing taxes online through an e-file system, you can often get your refund almost as fast as you can get through one of these loans. Consider carefully whether you really need one of these loans, as they take most of your refund.
• For example, these types of loans typically charge $ 50 and interest up to 36% per annum. Using this information, if you borrow $ 2000 for 15 days using this type of loan, you will owe $ 80 for interest and fees. This puts RAL in the same group as other high-level loans.

Take out the down payment. You can use your credit card at a bank to get a small loan that will be applied to your credit card bill.

• If you have a credit card issued by a large company (such as Visa, Mastercard, Discover, or American Express), you should be able to take it to your local bank branch and request a down payment, even though the fund goes into interest rates much higher than card transactions your regular credit.
• Try to pay back the down payment with your next statement. If you fail to do so, the interest will be carried over to the next payment.

• Be warned that this advance generally charges a 24% interest per year, plus a 5% fee.
• For example, if you take an average down payment (24%) for $ 1,000 and pay it back a year more with a $ 100 payment, you'll end up paying around $ 190 for an all-time loan.

Get a payday loan. The last possibility if no previous methods are successful and you need cash quickly is getting a payday loan. There are many businesses, both "bricks and mortar" and online that will offer loans for your next paycheck. This high level secure loan should be used only as a last resort.

• To get one of these loans, you need to provide a check lender, or with your account number and routing number. If you do not refund the loan on payday, or if you do not transfer funds back to the lender electronically, the lender is entitled to deposit the check or withdraw funds online.

• Because they have high interest rates, most creditors provide very high interest rates for these short-term loans. The annual average percentage rate on payday loans is 390%.  Avoid taking any of these loans, but if you have to pay them back quickly, because the interest will quickly accumulate.
• Beware of payday loan traps. Many people who take payday loans fail to pay them back. Thus, they end up taking more debt. Over 60% of payday loan borrowers pay more interest than they borrow. It traps this lender in an endless cycle of debt. 

• For example, on a $ 500 payday loan, assuming a 300% interest, the borrower can expect to pay $ 125 interest per month alone. This means that at the end of the first payment period (usually two weeks), the borrower must pay the total amount of about $ 560 or be forced to receive higher payments in the next cycle.

source : Wikihow