When times are tough financially, many people need a little bit of help to get them through. Many circumstances come up in everyday life, where some extra cash is necessary. Personal loans and payday advances are a few of the tools that are commonly used. Let’s take a look at both of these options and weigh the pros and cons of each choice.

Things come up every once in a while that require money that you just don’t have. Car repairs and medical bills are just a few to mention. Many people live paycheck to paycheck and just do not have the extra money in their budgets to cover these unforeseen expenses. Using a payday advance is one option that many people utilize to cover these charges. This is a good solution in many incidences, but it can strain your bank account tremendously. A payday advance is exactly what it implies. You are in essence borrowing money from these types of businesses with the promise to pay back the money the next time you get paid.

In reality you are not adding extra cash to your financial profile, just receiving it earlier than normal. The unexpected expenses are still eating up a good portion of your monthly income and a payday advance can get you behind on all of your bills, which can take you months to catch up and hurt your credit score. Plus, these types of businesses that offer payday advances usually charge large fees for this service. Many places will charge up to forty percent of the advance. That is quite a bit of interest to be paying for an extremely short loan.

Taking out a personal loan to help with these unfortunate bills could be the smartest choice in the long run. If you can obtain a personal loan with a reasonable interest rate you are already saving money over the payday advance. The loan also helps your budget by adding money, not just shifting accessibility to it in your overall financial situation. It is easier to pay back the personal loan over a longer period of time and it will not put you in a major bind when it comes to paying your other expenses. Another benefit to using a personal loan is that it will help your credit score, the only thing a payday advance can do is hurt your credit, if you cannot pay it back when due.

Overall both forms of financial help can be beneficial, but in the long run a personal loan is usually the better choice.