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picking the correct personal cash advance for your needs can be tricky, and if don’t know what you are getting yourself into then you could end up in financial difficulties. Here are some top techniques to use when picking a personal cash advance:

Secured vs. unsecured

A secured cash advance is a cash advance that is secured against collateral, such as your house. Secured cash advances have better rates than unsecured cash advances, but they are more risky because you could lose your house if the repayments are not met. If you are borrowing a small amount of cash and have good credit, then go for unsecured cash advances.

Borrow as little as you can over a short period

The more cash you borrow over a longer period of time, the more interest you are going to pay. Borrow as little as you can afford to, and pay it back as quickly as you can so that you minimise the interest payments.

Fixed vs. variable

Most personal cash advances have fixed interest rates. This means that the monthly repayments will remain the same throughout the cash advance period. However, some lenders offer variable or flexible cash advances. These cash advances are good if the rate goes down, but remember budget for the rate going up as well.

APR

APR or Annual Percentage Rates determine the amount of interest you pay yearly on the cash advance. Although a low APR might seem appealing, be careful because this is not the only charge that you are liable for when paying back your cash advance.

Typical APR

If you are comparing APR, then it is good to understand the concept of ‘typical’ APR. Although you may qualify for this rate, it pays to remember that unless your credit history is good, you will end up paying a higher APR than the typical advertised rate.

TAR

A better way to look at how much a cash advance will cost is the TAR or Total Amount Repayable. This will show you exactly how much you will repay to the lender. The lower the TAR then the better the overall package is.

Shop around

The essential thing to do before getting a cash advance is to shop around. Before you sign anything, make sure that you have looked at all possibilities for your needs. If you can separate all the various features of a cash advance and concentrate on the features you require, you can find the best rates for your needs.

Look online

Although your bank may have a good deal, most of the best cash advance deals are to be found online because of the low overhead costs associated with online companies. You can find many web sites that will allow you to compare the best personal cash advance prices, helping you to get the best deal for your needs.

Beware of PPI

When securing a cash advance, it is likely that you will be offered PPI or Payment Protection Insurance. This insurance covers your payments in case of illness, accident or unemployment. Although this insurance may help you, very few individuals are eligible to claim under its terms, and it is very expensive. Look to see if your current employer covers some of these items, or find a cheaper stand-alone policy that will cover you.

Early settlement

Nearly three quarters of all cash advances are paid off early, so it pays to know the charges for doing so. Although charges can still be high, more and more lenders are scrapping the charges altogether. Finding a lender that does not charge for early repayment might save you a lot of cash.