Here Is a Smart Way to Renew Cash Advance Loan and Not to Lose Money
Many points of view advise against renewal (rollover) of fast cash advance loans . The truth is, if you use it wisely, you reap all the benefits. People, who say that renewals cause debt, prey on the borrowers who usually rollover loans for several times paying huge amounts of money in interest. You are about to learn the smart method of rolling over a fast cash advance loan with beneficial outcomes.
Once you renew a loan with, let’s say 20$ interest, you add $20 more on top of the first fee. If the borrowed amount was $100, after renewal you would have to pay $100 + $20 (the initial interest) + $20 (the interest upon renewal) = $140. This simple math doesn’t look like robbery at all. It’s more of a costly operation.
As you can see, you have already paid the interest equaling to 40% of the borrowed amount. That is why rollovers must be used wisely and under no circumstances should exceed 4 times, provided that the law permits several renewals. This might be the only option for the people who have already used an extended payment plan in the last 12 months.
If you want to use loan renewals like a pro, take a look at the simple tips: Tip 1. Ask your lender if your deal comes with installment payments. It puts less strain on the budget although the total interest might be a bit higher in the end compared to one full down payment.
Tip 2. If you weren’t lucky with suggestion #1, find out if you are eligible for an extended payment plan:
- You did not take another EPP in the past 12 months.
- You have not passed the due date of your current fast cash advance loan .
- You abide to any other regulations regarding EPPs in your own state.
Tip 3. Prepare for a renewal in advance just in case the above tips won’t work. Prior to taking a fast cash advance loan , calculate your needs and resources:
- The total income for this month;
- The total amount of expenses;
- How much interest you can afford to pay;
- How many renewals you think would be necessary to get things done. To succeed, you should have a fairly organized view of your budget:
- What are the due dates of your most important bills (prioritize them according to their urgency)?
- How much would cover your most urgent expenses?
- When you receive the salary to your account?
Organize yourself to be sure:
- You renew the loan for a small number of times.
- You can cover a great part of your expenses without giving up on important things.
- You don’t exceed the due dates on most of your bills. Otherwise, you hurt your credit score. Payment history makes 35% of your FICO score, so now you understand why it’s important to pay on time.
- Don’t be foolish enough to enter a never ending debt cycle. Under no circumstances should you do more than 4 rollovers. It is very easy to fall in this trap. If you live in a state that allows unlimited rollovers, and you renew a $500 loan 5 times with 15% interest, you increase your costs by $75 x 5 = $375. Adding the initial interest of $75, you pay in total $575 + $375 = $950 for a $500 loan. As you can see, the costs are doubled. Renewals are beneficial and can get you out of trouble as long as you have no other options and you keep them to a minimum. Always calculate all the costs related to your fast cash advance loans in advance to avoid unpleasant surprises along your financial activity.
Renewals are beneficial and can get you out of trouble as long as you have no other options and you keep them to a minimum. Always calculate all the costs related to your fast cash advance loans in advance to avoid unpleasant surprises along your financial activity.