Cash Advance vs. Pink Slip Loan?

You’ve just gotten the call, and now you’re in a panic. Chicken Little was right, the sky *is falling, your mom’s coming into town to pay you an unexpected week-long visit! To further complicate matters, she’s bringing other family members with her, and you’ve got more to worry about than finding enough pillows, blankets and areas for them all to sleep in your one bedroom apartment! It’s not that you don’t love your mother, and related family, but as you open up the food cupboards and see the dust bunnies on the shelf, and spy the single half-loaf of bread and crust of cheese in your fridge, you realize you’ve got to at least feed them all week as well not to mention visit the usual local tourist attractions in your area that your mother *never tires of!
Normally not a problem, but you were paid just last week, next payday is a week away and you’ve got zilch left cash-wise! You’re trying to stay calm, thinking about getting a Cash Advance to spot yourself enough funds to survive this familial onslaught, but just then your phone rings again. It’s your pal Janet, fresh and breathless from a shopping spree, which is a bit suspicious as you know her finances are no better than yours. You explain your woes and your intention to go online and get a Cash Advance, when she interrupts with the fact that the reason *she was able to afford shopping was because she qualified for a “Pink Slip Loan”, which netted her more cash than a Cash Advance, and she advised you do the same as well.
Before you follow Jan’s lead, my friend, it’s important that you stop, take a step back and learn more about the differences between the 2 types of loans. This is a decision directly affecting your finances and although Janet’s choice of loan may have been the right one for her, it may not be the right choice for you!
Both types of loans are easily qualified for, and require that you be over the age of 18 and employed. In addition, both loan types are quickly approved and you most likely will have your needed funds within 24 hours, if not the very quickly. There are some lenders who offer both types of loans out of the same facility or website, and both types of loans are regulated by Federal Truth in Lending laws as well as other regulatory laws that vary state by state. Your credit history is not a factor with either of these loan types.
A Cash Advance loan is just that, a Cash Advance. You’re borrowing against your next paycheck. The amount you can borrow is based upon your income, and ranges from $200 – $1000, sometimes higher. Again, this amount is determined by your income, a reputable lender does not want you to borrow more than you can pay back next payday. There will be a finance fee, regulated by your state, per $100 borrowed or based upon the lump sum. There is no collateral involved and you do not give up any personal property.
“Pink Slip Loans”, sometimes also called a “Title Loan”, uses your car title as collateral for the loan. You may be able to borrow more via this type of loan, as you can receive up to 50% of your cars “blue book” value. Many lenders offer 2 options, a lower interest rate with the first several payments on the interest only, with the last payment a “balloon payment” or balance of the loan. Or, your loan can be processed at a higher interest rate, with regular payments towards interest and the principal. Pink Slip loans are not due on your next payday and are written for 90 days or so. You may or may not be able to keep your car during the length of this loan, this policy varies by provider, also, a Pink Slip lender will take steps to ensure they can collect on the loan, or repossess your car, in the event payment is not made. In addition to the title, they may request another set of key’s etc.
Which type of loan you opt for is a personal decision. You have to determine literally, what its worth. Is having cash worth giving up your personal property? If your car is paid off already, how will it feel having to pay on it again? If you’re looking for cash to tide you through a smaller emergency and you can afford to pay it back next payday, then it’s probably best to go with the Cash Advance. If you require a very large amount of cash immediately and have no other options, then a Pink Slip Loan is probably the right choice for you. In the case of your family invasion, depending on how much you are spending in preparation, probably best to go with your first idea and apply online for your Cash Advance and leave Janet to her shopping. Move quickly now, that way you have time to buy groceries *and clean before your guests arrive!