Life can hit you with a lot of surprises. And sometimes, those surprises come with surprise price tags, which you may not be able to offset. When a desperate need for quick cash hits, you often find yourself with two popular options: an online cash advance and traditional loans.
But which is the heavyweight champion that’s a perfect match for you? Let’s get to this lending rumble and see who comes out victorious! And most importantly, give you a helping hand when you are in a pinch!
Round 1: What Is an Online Cash Advance vs. a Traditional Loan?
First, let’s get acquainted with our contestants.
- Online Cash Advances: Meet your greased-lightning sprinters of the finance world. These small, short-term loans (usually due on your next payday) are granted by online lenders. They’re easy to get, with a simple online application, and can get to your bank fast. Cash advance speed—we all love that!
- Traditional Loans: Meet your experienced marathon runners. These bank or credit union loans are usually larger, with longer terms and a more complicated application than most small loans. You’re looking at your mortgage, personal loan, auto loan, or anything over the small-time loan line.
Round 2: Online Cash Advance vs. Traditional Loan – Key Differences
| Attribute | Online Cash Advance | Traditional Loan |
| Amount | Smaller Loan Amounts | Larger Loan Amounts |
| Speed | Fast (application & funds) | Slower processing time |
| Credit Score | More frequently, less strict | Needs good credit rating |
| Repayment | Short-term (usually one payment) | Long-term repayments, instalments |
| Interest Rates | Generally Higher | Generally Lower |
Round 3: The Downsides of Online Cash Advances and Traditional Loans
No financial solution is perfect. Let’s examine the drawbacks of each:
Online Cash Advances
The very high interest rates mean that if you can’t pay it back on the next payday, a cycle of debt is possible. To avoid this, only borrow what you are sure you can repay on your next payday. Late fees add up very fast, too.
Finally, some shady lenders are out there that engage in predatory practices. You can use your discretion with this; we find it’s best to stay with larger, well-known lenders. Do your legwork and research to make sure you get the right lender. Make sure you look at as many reviews as you can and search every corner of the internet!
Traditional Loans
You could find the application process more irritating and tedious if you really need the money as soon as possible. You may get a high interest if you don’t have a good credit score. You may be shocked to find early repayment penalties if you’re looking to pay off your loan ahead of time.
The Verdict: It’s All About You!
The “winner” of this particular match-up is entirely dependent on your personal financial situation and needs.
Choose an Online Cash Advance: If you need a small amount of money quickly, have a sound repayment plan, and can handle a higher-interest loan.
Choose a Traditional Loan: If you’re requesting a larger amount of money, you have good credit, and you are comfortable making fixed payments for an extended time.
Before you make any decisions, do your homework, shop around, and make sure you can afford repayment terms. Information is the best tool; you can come out on top with the right financial decisions! Good luck, and happy borrowing!
