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Long-term Borrowing Considerations to Make

Short-term lending services are tailored to those who could benefit from short-term financial solutions. If you've ever been left stranded because your car broke down or have an unexpected bill that shows up, you likely understand the importance of having a way to borrow money. Most loans come with a one or two week period before the balance is due in full. If you need more time to come up with the money, it is probably best to consider a long-term loan option, which we will discuss in greater detail..

Take a Closer Look at the Two Types

Long-term options:

  • Apply for a lending agreement with repayment dates beyond the standard one or two weeks
  • Are often associated with a more stringent qualification period that will likely include a credit check
  • Are geared towards consumers that require larger sums of money to borrow

Short-term options:

  • Are geared towards consumers that can expect to repay the lender in full within two weeks
  • Are easy to qualify for and typically do not come with credit checks
  • Are usually offered in amounts less than $1,500

Some Things to Think About...

  • Review all documents: terms and conditions vary between providers, so it is important that you understand what you are getting yourself into. Before you sign any contracts, be sure you are aware of the how much you will receive, the interest fees associated, the repayment date and the penalties for not repaying in full on time.

  • Compare providers: Since each company will offer slightly different products, it is in your best interest to comparison shop for a loan much like you would anything else. Be cognizant of the price, but also consider the overall value.

  • Repay what you owe when it is due: One of the quickest ways to fall into a negative financial spiral is to begin racking up interest fees and late payment charges because you didn't pay back your lender on time. Failure to repay on time will add to the balance you already owe as you accumulate more interest. If this becomes an ongoing issue, talk to your lender about your situation to see if there are any programs that can assist you.

  • Don't request more money than you actually need: These services can be used responsibly from time to time, but you don't want to get into the habit of using them often. Also, be sure you are only taking out the amount you need, not want. Establish a budget to keep yourself accountable.

Can I Pay Off an Unsecured Debt With a Long-term Lending Service?

It is common for people who take out a cash advance to have other outstanding debts as well. You might even request more funds during your payday loan period for other purposes. But what about for paying off the unsecured amount you owe? Is it possible for you to pay off what you owe using a regular borrowing service? Better yet, should you even use the regular loan to pay off the other balance you have?

Is This a Valid Repayment Option?

Sometimes there can be some hassle when it comes to paying off your unsecured lender. This is a difficulty that very few people want, and that is understandable. It may even become hard to pay off the unsecured balance because of the interest that accumulates. It is possible that you might have to request more advance funds just to pay for your original debt. This is obviously a scenario that you want to avoid, but one that might not be possible. That is when you will start to look for other options for paying your lender back.

This is where the temptation to request more funds in order to pay will arise. The good part about secured borrowing services is that they will typically have a lower interest rate then your cash advance will. But qualifying for a conventional borrowing agreement is not as simple as snapping your fingers. In order to qualify for one of these options, and get an desirable one, you must have good credit. Odds are because of your tendency to rely on cash advances that you do not have great credit. This can be a big hindrance when you go to apply for another lending agreement. If you can get approved for a good interest rate then you should definitely look into doing so. Just know that is might not be as easy as you think.

Other Options to Consider

Before you request money, hopefully you took your financial situation into account. This means that you do not get approved for more money then you know you can pay off during the next pay period. Also, you do not want to take any more money then you to take. During this time period it might be smart to look into a credit card. If you are able to qualify for these cards you will usually get a low introductory interest rate that could possibly help with balance transfers. Then the next step is to get your budget is good shape. This may help you unlock money you did not even realize you had. That will really make repayment a lot easier. Also, make sure that you approach your provider and ask about a specialized plan. They may be able to help you by letting you pay off your balance in installments. If worse comes to worst, then you can also look into a debt counseling program.

Why Not Consolidate into a Secured Option?

When you first opted to request advanced funding you were thinking about your immediate need for money and did not have the time to wait for the normal lending process of a bank or credit union. Now that you have taken on more debt and the fees are piling up, you have some time on your hands more likely than not. Visiting your local bank or credit union online and seeking a conventional or even secured option that will allow you to pay off all of your debts - consolidate them - may be one avenue of escape.

Some borrowing fees are equivalent to interest rates well over 200%. A conventional, personal loan from a bank is probably going to have an interest rate of 20% tops depending on your credit. The conditions will be a lot less stringent, and you won't have to juggle back and forth sending money to many different providers. When all is said and done, borrowing from an institution that is used to pay off a handful of debts can save you hundreds or thousands of dollars in the long run as well as lots of time, gas and stamps!

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