How Cash Advances Differ from Conventional Loans

  • Debt extension. Think over a chance to negotiate the payment extension with your bill providers. They may offer some more flexible schedules letting you avoid accessing extra loans.
  • Part-Time job. Having a side source of income is not that bad. With so many offers like food delivery, gas station operator or c-store worker you might find a side job and earn extra bucks to cover the debt.

If none of the above-mentioned will do the trick in your particular situation, payday loans seem to be the only solution to the problem. So, let’s start from the beginning.

We have discussed the main benefits of cash advances earlier. They make it clear how instant loans differ from traditional financial services. Here are some key factors that make the difference a bit clearer:

  • Terms. Cash advances come with a shorter loan term. It means you need to repay faster. It is a good thing, as you pay off the debt and forget about it, while conventional loans often turn into a financial trap.
  • Cost. Payday loans are more expensive. In some states, the APR rate may reach $400. Let’s say, you need to borrow $1,000. A simple calculation will show you that cash advances may appear to be a challenge when it comes to repayment.
  • Regulation. Conventional loans look safer for customers, as banks are totally regulated by the government. Well, some states regulate payday loans as well. They prohibit borrowing multiple times or leave a borrower in debt for more than 45 days. The terms may differ from state to state.
  • Application. Cash advances are easier to apply while conventional loans require tons of documents and copies to prove customer’s creditworthiness.

Brokers or Direct Lenders

This issue is always confusing especially for people who have never used such types of financial services before. Some believe that direct lenders are a better option while others consider brokers as a more safe and flexible alternative. Let’s find out the difference between them and key factors to take into account.


Agencies or individuals operate as intermediaries between the lender and the customer. They do not lend you money but link you with the firm that offers the most suitable terms. In other words, a broker looks up the best payday loan offer to meet your requirements. All of them are licensed, regulated by the government and operate on a legal basis. The problem is they charge extra fees and commissions for their services.

Direct Lenders

Judging by the term it should be clear that direct lenders are firms and provide cash without third party involvement. Good news is that you do not have to pay any commission. The pricing policy and costs are clear. You get money directly from the lender. On the other hand, the rise of payday loan popularity results in fake companies and unfair firms. There is a risk of getting into huge financial trouble.

How to Choose a Trusted Lender

Although more and more firms appear both live and online, selecting a trusted one will hardly be a hassle. All you need is to keep an eye on some fundamental details that will let you define a trusted lender and avoid the risk of opting to fake or unfair agencies. Consider the following:

  • Reputation on the web. Surf the net and look for as many customers’ reviews as you can. The Global Web is a huge community of consumers who are happy to share their experience. The niche of payday loans is not an exception, At least, you will always know which companies are good top apply and which are better to avoid.

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