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$2,000 Payday Loan

A $2,000 payday loan or cash advance can often seem like a good deal to a person in a desperate situation.

In most cases, a $2,000 payday loan is a very bad deal for the average borrower because of the high fees and interest associated with it. The costs of a cash loan can quickly add up and eat up all of a borrower’s available cash. In many cases the borrower ends up with extra money because they have to spend everything to pay off the $2,000 payday loan.

The way to avoid this situation is to get a good deal on a $2,000 payday loan and pay the cash loan off very quickly to avoid the high fees and interest. A person who carefully manages a $2,000 payday loan can quickly pay it off and walk away with extra cash.

How a Payday Loan Works

The way to get a good deal on a $2,000 payday loan is to understand how cash loans work. Lenders are willing to give a $2,000 payday loan to almost anyone because of the high cost and quick turnaround.

Generally, a payday loan comes with a high interest rate and a very short life span. Most cash loans will be due in one or two weeks or a month. This means the loan will have to be paid off or the borrower will have to open a new loan. The lender will usually charge the borrower a $50 or $100 fee to open the new loan.

At the same time the lender will assess interest usually 25% or more on the loan every time it comes due. If the interest is 25% the borrower will have to pay $400 plus the $2,000 loan principal. If a $2,000 payday loan gets renewed several times a borrower can end up paying $3,000-$4,000 to pay it off because of the fees and interest.

How to Get a Good Deal on a Payday Loan

The way to get a good deal on a $2,000 payday loan is to pay attention to the written loan offer. There are cash loans with lower interest rates and better terms available.

Try and get the lowest interest rate you can on a payday loan. The interest rate will still be high but if you can find yourself a cash loan with a 15% interest rate you can save yourself quite a bit of money. The interest on a $2,000 payday loan with 15% would add up to $300 which is still expensive but better than 25%.

The next thing to look for is a loan with a long duration. In particular get a loan that does not have to be renewed so the borrower doesn’t have to pay a fee for renewal. Eliminating the fee can save a lender $50 or $100 every few weeks on a $2,000 payday loan.

Also look for loans that may reward borrowers for paying them back earlier. Some borrowers may charge less interest or waive fees for paying the cash loan back earlier. Many lenders will also be willing to give borrowers with good credit a better interest rate.

Alternatives to Payday Loans

A borrower should always investigate all of the available alternatives before taking out a $2,000 payday loan. There are many other sources of credit available that cost less.

A line of credit is an agreement that makes a certain amount of credit available to a borrower. The advantage to a line of credit is that the borrower only pays back the credit they actually use rather than the full $2,000.

Another good alternative is a home equity or real estate equity loan. These loans are secured by equity in a piece of real estate. The main advantage to real estate equity loans is that the interest is far lower than that charged on cash loans. Another advantage is that the borrower will have several years to payback an equity loan so loan payments can be kept low.