Many instant cash loans may charge a prepayment penalty for paying off the cash loans early. While that may seem outrageous with just a quick glance, there is at least some justification for the practice. There are of course other types of penalties sometimes associated with instant cash loans as well.
Among the most common is a practice known as Penalty Repricing, but the more familiar you are with the different types of instant cash loan penalties, the easier it will be to avoid unnecessary costs even when you need money fast. However, among the most common types of avoidable cash penalties are the prepayment penalty.
Some people have already received their tax returns while others may still be waiting on their tax returns to arrive by mail. Some people will be looking to get tax return advance loans in order to ensure that they get their tax returns as quick as possible.
Some other people, after doing some shopping and comparing the costs, will ultimately decide their best option is to get a more traditional payday advance loan. In this way, when they do receive their tax returns or any other cash influx they may have been expecting, they can pay off the loan in full and save a lot of money in the process.
In order to do this successfully, and as unpleasant as the situation may be, it will be necessary to understand the terms and conditions for the payday advance loans, and what the potential penalties and costs will be. In that way, there is always an option for the borrower to make the best decisions about instant cash loans based on their personal financial needs.
Is There Another Penalty For Instant Cash Loans?
Penalty repricing under that or other monikers is one of the most common types of cash penalties for instant cash loans. That is generally a rider or clause in the loan agreement where the interest rates will be adjusted accordingly. In the event that the borrower may miss a loan payment, the interest rates will be adjusted and the borrower will be forced into a higher interest rate.
Some of the instant cash loan advance lenders have managed to include loan fees and make them a more integral portion of the cash advance loans. In some cases, there will always be an option to get an “extension” where it is only necessary to pay a new loan fee, and it is unnecessary to make a full loan payment.
That may even sound like a very tempting option in many cases. I mean seriously, if you had your choice of being out fifty dollars or had an option to only pay ten bucks out of your pocket, it may sound like keeping the additional forty dollars would be the best option. The challenge here is that many of these types of instant cash loans will either extend the existing loan or create a new loan to justify the payment of the fees.
At the end of the day, you are paying less money out of pocket and should have more available cash for your personal needs. Unfortunately, the flip side of that coin is the fact that you have not paid any interest on the loan, and not paid out anything on the principal value of the loan. In short, all you have bought and paid for is a little bit of time at an added cost.
How Do I Know If Quick Cash Loans Have Prepayment Penalties?
People tend to hire personal financial advisors for the very same reason they hire lawyers and accountants. These professions, including financial lending services, tend to have a very specific terminology and many terms and conditions often hidden in plain sight.
Not everybody is going to be able to sit down and read all of the terms and conditions and walk away with an accurate and complete understanding of the terms of the loans. In the event that you are one of the many people who may have a challenge understanding the more intricate terms and conditions, try to find direct lenders that at least have customer service representatives if not full financial advisors to assist the borrowers.
Whether you are working with a direct lender online or a nearby local lending store, you should have the opportunity to discuss all of the terms and to ask any questions you have before you agree to the fast cash loan. This is the best time to learn all of the potential penalties and to determine whether or not this type of loan is right for you.
Given the cost associated with many of the tax return loans, some people will opt for the instant cash loans in lieu of a more expensive tax return advance loan. That being said, there are also some good deals on tax return loans, but this again boils down to the ability of the borrower to understand the terms of the cash loans and to decide the best options based on your personal needs. That being said, the cheapest loans may or may not always be the best deals for instant cash loans.
How Do I Avoid All Cash Penalties With Instant Cash Loans
As a borrower you should never be dissuaded from or hesitant to speak with a customer service representative or other financial adviser before agreeing to any of the instant cash loans. The prepayment penalties are only one of many cash penalties you can legally avoid if you know what you are getting into before signing the loan agreement.
There are even some cases where a missed loan payment becomes inevitable, maybe due to a lost job, maybe due to changes in banking, or any other factors beyond the control of the borrowers. That again points back to why you must understand the terms and conditions for the instant cash loans. There is also something commonly referred to as deferred payments, but that may be better suited for a separate article.