Cash advances, also referred to as installment loans, may be the best option if you have an unexpected expense. However, it is important to understand the difference between expenses for which short-term loans are a practical solution and those that are better off being paid with other means. Knowing when you should and shouldn’t be trying to find monthly installment loans will help you make the right financial decisions going forward.
When It Makes Sense to Get a Cash Advance
Your Car Breaks Down
A car is a necessity because you need to have it to get back and forth to work. You also need it for all of your other obligations. That is why you may need to take out a cash advance to pay for your car repairs. You will be able to quickly get the funds, which will allow you to get your car back on the road in no time.
You Have Bills
Most people who take out cash advances use them to pay for bills. If you have to pay your rent, groceries or utilities, then you can use a cash advance to help you. A cash advance can help you stay on track with your payments. Once you fall behind on payments, it can be hard for you to get back on track.
Furthermore, missing certain bill payments can carry serious consequences. For example, if you miss too many car payments, then you may get your car repossessed. If missing a bill payment will be costly, then it is best to take out a small loan if you do not have another option.
You Have an Unexpected Medical Expense
An unexpected trip to the doctor or hospital can cost you hundreds of dollars. Even if you have health insurance, it can still be difficult for you to pay for an unexpected medical expense. Medical bills can pile up quickly. You can use a small loan to pay for your medical bills and other health-related expenses.
You are Unable to Get a Bank Loan
It is easier for you to get a cash advance than it is for you to get a bank loan. That is why if you have been turned down for a bank loan, then you may want to apply for a cash advance.
When You Should Avoid Taking Out a Small Loan
Monthly installment loans should only be used for necessities. That is why you should not use a small loan to pay for a vacation. It is also important to remember that you will not only have to pay back the loan, but you will also have to pay interest.
Many people will take out a loan because they want to buy something for their loved ones on their birthday or during the holidays. However, you should not go into debt because of a shopping spree. You will have to explain that you cannot afford a gift.
Cash advances can be a lifesaver if you need quick cash. It is important for you to know when you should and shouldn’t take out a cash advance. Medical expenses, car repairs, and bills are examples of some of the things that you can use a cash advance for. You may also want to get a cash advance if you cannot get a bank loan. However, cash advances should not be used for things like shopping sprees and vacations.