Source: www.fool.com

How to Choose the Right Option for You Between Balance Transfer vs. Payday Loan

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When you are facing a financial emergency, it can be tough to know which option is the best for you. Should you get a payday loan, or try to do a balance transfer? In this blog post, we will help you make the right decision for your unique situation!

Balance transfer and what are the benefits of doing one?

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A balance transfer is when you move your credit card debt from one card to another. This can be a great way to save money on interest, as the new card may have a lower interest rate than the old one.

There are a few things to keep in mind when doing a balance transfer:

– You will need to have good credit in order to qualify for most balance transfer offers.

– There may be fees associated with transferring your debt. Make sure you know what these fees are before you proceed.

– You will need to make sure you are able to pay off the entire amount transferred within the promotional period, or you may end up paying more in interest.

Balance transfers come with zero interest during promotional periods, while payday loans usually have high APRs (upwards of 200%). With a balance transfer you can avoid paying interest on your debt for up to 24 months! The downside is that there will likely be fees associated with transferring balances between cards, which could add up quickly depending on how many times you do it. 

A payday loan and what are the benefits of taking one out?

Source: www.consumerfinance.gov

Payday loans are short-term loans that can help you get cash fast when you need it most. They typically range from $100-$1000 and have high interest rates (this means they cost more), but if used responsibly, they may be able to provide some relief during difficult times! In order to qualify for this type of loan: 

– You’ll usually need good credit history with no major blemishes on your report. This is because lenders want assurance that their money will be repaid in full before lending out any funds at all.

– There will likely be fees associated with getting approved for these types  of loans, as well.

– The amount borrowed must be paid back within a set period of time (usually less than 30 days). If this isn’t possible, then it will cost more money to extend the loan for another month or two until you can afford repayment.

Payday loans are fast and easy to get, but the downside is their high APRs make them very expensive if you’re not able to pay off what was borrowed in full within 30 days or less (for most payday loans).

When should I use each?

In order to make an informed decision about whether balance transfers vs payday loans are right for your situation, Mirek Saunders of PaydayChampion, a unique company that connects borrowers with lenders, advises to consider these questions: 

-Do they have any fees associated with them? 

-What interest rates do both options offer? 

-Will there be penalties if I don’t pay off my debt before the promotional period ends on either option? 

-Can you afford to repay what was borrowed in full within 30 days or less (for most payday loans)? 

The answers may help inform you on what’s best suited for your needs at this time.

Which one is better?

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It depends! If you need cash fast and have good credit, then a balance transfer could work well because it offers zero-interest rates during an introductory period. However if that isn’t an option due to poor financial history then payday loans may be the way forward as interest rates are typically lower than other types of financing products available online today such as car title loans or even personal ones where collateral like property would need to be used instead. 

For example: let’s assume someone wants some quick funds before their next paycheck arrives so they decide against taking out another loan from family members who already know about how much debt there currently exists within household income levels; instead they find an online payday loan company offering competitive rates but with no hidden fees attached so this could potentially save them hundreds of dollars over time if able to make regular payments each month until all debt has been paid back in full; it’s important not just choose any provider though as some may have higher APR than others.

How much does it cost?

Source: worldfinancialreview.com

Both options offer zero-interest rates during promotional periods. The balance transfer option has a fee of $0-$150 depending on your credit card company and how many times you want to transfer balances between cards with no limit as long as there’s room for more debt consolidation so this can add up quickly depending on how many times you do it! A payday loan will likely have an APR upwards 200%, making them very expensive if not paid back in full within 30 days or less; however these fees are usually lower than other types of financing products available online today such as car title loans or even personal ones where collateral like property would need to be used instead.

In conclusion:

It can be difficult to know which option is best for you when it comes to balance transfers vs payday loans- both have their own unique set of pros and cons. Consider your specific situation and what you hope to accomplish before making a decision. If you’re looking for fast cash and have good credit, a balance transfer could work well because it offers zero-interest rates during an introductory period. 

However if that isn’t an option due to poor financial history then payday loans may be the way forward as interest rates are typically lower than other types of financing products available online today such as car title loans or even personal ones where collateral like property would need to be used instead.


Ricardo is a freelance writer specialized in politics. He is with foreignpolicyi.org from the beginning and helps it grow. Email: richardorland4[at]gmai.com