By Marc Dooley
November 15, 2011

So you've found yourself in a bit of a financial bind, and need a little help to get through it. Don't be embarrassed; it's happened to just about everyone at some point or another. What you need to do now is figure out how to deal with it in the best way.

And if your credit cards are maxed out, and your family members or friends can't help, there are only a couple of real options: 1) a personal unsecured loan, or 2) a payday advance.

Both Personal Loans and Payday Advances may help get you out of a short term financial jam. So now comes the very valid question: Which is better? Well, that can depend a lot on your personal situation, and what you hope to get out of the situation (besides the obvious cash). So let's take a quick look at both.

PAYDAY ADVANCE (LOAN): It's a cash advance, not a loan!
Many people refer to this option as a payday loan. However, the more accurate description is "payday advance." It is not a loan. It is a cash advance with a large fee. You write a check to the Payday Advance company. They typically give you 80% of the check amount in cash, and then they hold the check until your "payday" which is typically when the money to cover the full amount of the check will be in your checking account. The Payday Advance company then deposits the check and keeps the 20% as their fee for the cash advance.

Odds are you've seen the brightly lit signs of a Payday Advance shop next to some liquor store or in a strip mall, or you have seen them advertised on TV, in e-mails or in banner ads online. The amount of money Payday Advance companies can provide is limited by state law and is typically a maximum of about $500. In California, the maximum advance is $300.

So, the advance may be enough to get you through small cash emergencies when you're between paychecks. If you need a quick couple of hundred bucks -- for groceries, if your car's alternator goes out, you chip a tooth, etc -- a Payday Advance might be a viable, but very expensive, option.

However, very often a Payday Advance is only enough to delay the cash emergency for a few weeks, and not enough to get you totally out of it. As a result many people find themselves getting multiple Payday Advances, which can be extremely expensive when each advance costs you a 20% fee. Ten payday advances over the course of year would equal an effective interest rate of over 200%! A very expensive way to go.

And, since a payday advance is not an actual loan, it can do nothing to help your credit status.

PERSONAL LOANS: Get much more money at a much lower cost.
A personal loan is actually a loan that you repay over time via affordable monthly payments. You can get much more cash than you get from those payday advance places - and you don't pay a 20% fee over two weeks!

Of course, if your credit isn't perfect, your bank will turn you down very quickly. However, CashCall makes personal unsecured loans, up to $10,000, to people in a cash jam, who have less than perfect credit! This is the kind of money that can really help if you're facing major car repairs, medical issues, looming bills, etc. The loan money is placed directly into your checking account in about a day, and there are no limitations on how you can use your cash. It's up to you.

A personal unsecured loan from a company like CashCall doesn't require any collateral or security. You don't need to be a homeowner, you don't need to turn over the title to your car - you don't need to do anything except apply, and provide some simple paperwork. The cash can be in your checking account the next day.

You use the money to get out of the jam you're in. And then, you can either make the affordable monthly payments or repay the loan when you can. There are never any fees or penalties for repaying the loan early, and you will minimize the interest you pay by repaying the loan sooner rather than later.

Another benefit of a personal loan from CashCall is that you can actually improve your credit score by making your monthly payments on time. That's right, you can rebuild your credit because CashCall provides all three credit agencies (Experian, Transunion, and Equifax) with your payment information because it is an actual loan, not a cash advance! And in the long term, that's the kind of thing that can truly get you back on your feet.

Marc Dooley is the Chief Marketing Officer for CashCall, Inc.

CashCall Personal Loans offers high-interest-bearing, unsecured term loans to qualified borrowers who typically use the loans for one-time purchases and debt consolidation. These loans of up to $10,000 are processed entirely over the Internet, phone and fax, and funds are wired into the borrower's checking account typically within 24 hours. CashCall Personal Loans are a good alternative to Payday Loans for borrowers. While interest rates are high, they are typically much lower than those of payday lenders, and CashCall Personal Loans have the potential to help customers rebuild their credit score by making payments on time.