How to Save on Cash Advance Fees

Cash advance fees make this financing option one of the most expensive financing available on the market today. Cash advance lenders go beyond traditional lenders by allowing interest charges to compound frequently and charging high fees for late or missed payments. The best way to avoid these fees is to avoid taking a cash advance. However, if you must take this high risk loan options, try these strategies to make the fees more manageable.

Use Collateral on the Loan

Most borrowers using cash advance options have poor credit that renders them incapable of securing a more stable loan option. If this describes your situation, you will need to use all of the tools at your disposal to lower the risk of your loan. The best tool to do this is collateral. When you place collateral on a loan, you must be prepared to surrender the collateral in a default scenario. For this reason, it is not advisable to place an item you could not live without. However, if you do have two automobiles, for example, consider using one to secure the cash advance. This provides the lender additional assurance you will not default, which can generate lower fees on the loan.

Schedule for Repayment

Repayment of cash advances is likely to occur in one lump sum, instead of with installments. This means you could be held accountable for a payment of a few thousand dollars plus interest depending on the size of your loan. If you cannot repay, you will be forced to take another loan from the cash advance lender. This is the mechanism many cash advance lenders use to create a debt cycle that ends up increasing the profit on the loan by 100 percent or more. Since you know you will have to repay the debt, plan for this repayment. Budget before your next paycheck, and pay the lender before any other lender you have on record. Your medical bills or rent may be able to wait if you ask for assistance, but a cash advance lender is not likely to allow any delayed payment.

Avoid Late Payments

If you do intend on paying, make sure the check is in the lender's hand at the exact minute it is do. Most borrowers will prefer to deliver the check in person to reduce any possibility it is lost or delayed in the mail. Make a copy of the check, and have the lender sign this copy to verify you delivered the payment on time. This will prevent any claims of delayed payment that may result in finance fees in the future.

Refuse Additional Undisclosed Fees

A lender has a legal obligation to disclose all fees to you at the beginning of the loan. If you feel fees were hidden, not disclosed or misrepresented, refuse payment of the fees. Contact the Federal Trade Commission or other regulatory body to file a claim in the Truth in Lending Act. Most cash advance lenders will be fearful of this claim and remove any undisclosed fees if you are educated enough to refuse payment.

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