Being strapped is more common than you may think. A cash advance is one of the best ways to get loans to sort emergencies. This option is popular because you can get an easy cash advance without formally applying for a loan and don’t require a credit check on major credit bureaus.
However, you must understand more about cash advances before considering them for your financial situation. This is because, as easy as withdrawing from your debit card, it can be expensive.
Overview of Cash Advances
A cash advance is when you withdraw money as a short-term loan from your credit card against its limit. You can borrow cash advances from a bank or alternative cash advance apps that act as payday lenders. However, since you borrow this loan against your credit card limit, it uses different (annual percentage rate) APR and fees. Some credit card companies may also establish a credit limit for cash advance checking.
These short-term loans can also be from your employer; unlike traditional loans, you won’t return them. You borrow this loan from your employer and receive it sooner than you get paid.
Types of Cash Advances
These cash advances are in the form of payday loans offered by payday lenders. Generally speaking, depending on your need, the amount can range from $50 to $1,000. These guaranteed loans come with fees of around $15 for every $100 or more. In addition, you will pay an interest rate, which sometimes exceeds 100%, depending on your payday lender.
The lenders consider several factors to determine the loan amount you qualify for depending on the platform or storefront you borrow from. Once approved, the lender will hand you the cash if you borrow in person or deposit it in your checking or saving account if you apply online.
Credit Card Cash Advances
Credit card companies offer credit card cash advances. You can get it as cash withdrawal at an ATM, check your deposit, or cash at a bank. You can receive up to 20% or 30% of your credit limit, with other credit companies offering up to 50%. However, it’s worth noting that credit card cash advance is limited to your revolving credit line. ATM, cash advance app, or a convenience check are the ways to access cash advance, making it among the best personal loans.
Merchant Cash Advances
Merchant cash advances differ because your credit card provider doesn’t extend them. Instead, they are offered in partnership with the company that processes credit and debit card sales for your business. These cash advances are extended to small businesses. They are based on your business’s past performance and future sales projections. You can get a fast merchant cash advance to inject into your business within days through a simple application.
Difference Between Cash Advance Loan And Credit Cash Advances
Also known as payday or same day payday loans, cash advances are accessible by writing a check dated for your next paycheck and applying with a storefront payday lender or online. The amount you indicate represents the loan you want to borrow, the lender’s fee, and interest.
You will get a credit cash advance by simply using your credit card to withdraw money from an online bank account, banking app, or ATM. Unlike a debit card, the bank will request a cash advance repayment that doesn’t have a grace period. The loan interest begins to accumulate as soon as you withdraw it.
How To Apply For The Quickest Cash Advance Loan?
You can get online cash advance loans by applying online through platforms that act as brokers and offer cash advances as payday loans. The lenders who offer online cash advances don’t check credit history. However, they will review your employment and income status.
The process is easy, starting with using “get a cash advance now” or “cash advance instant” as your search term to find a platform to borrow from. You will apply online, a free service, and have a short when the brokers show your information to multiple lenders. The feedback will appear on the screen. If you qualify, it takes one business day to receive the cash advance in your checking account.
Prequalification requirements include being 18 years old and having American citizenship. You must also have a checking account where you will receive your funds and be steadily employed, earning a certain amount monthly. You will get cash advance loans regardless of your poor credit score. However, the score may affect your repayment rates and terms hence the need to review the loan agreement before accepting it.
Cash Advance Fees And Terms
Cash advance offers quick personal loans, although they come with hefty terms like higher APR. Therefore, you should carefully review the terms since accepting means that you agree to pay the loan principal and related charges, which include:
Like personal or installment loan rates, the cash advance APR rates depend on the lender you borrow from. Most reliable platforms partner with regulated lenders who mind you as a consumer. If you borrow cash advances from such lenders, you should be ready for an APR ranging from 17.99% to 29.99%.
The fees for cash advance loans include the up-front and interest it will accrue. In most cases, the upfront fees are a percentage of the loan amount or a flat rate, depending on the loan agreement. Several loan lenders charge 3% to 8% of the loan or $5 to $12 as a flat fee. These charges are posted in your bank account as soon as a lender approves the loan.
Bank and ATM Fees
The bank will charge a fee for every over-the-counter or ATM transaction if you use a checking account to receive a cash advance loan. It’d be best to check with your bank to determine the fees it will charge.
Tips for Taking Out A Cash Advance Loan
Taking a cash advance loan requires caution because you can end up in more debt. Therefore, it’d be best to use the following tips to avoid debt collectors:
Research Extensively Before You Borrow Money
For starters, it will help if you extensively research by reviewing your bank statements to determine your financial situation. Doing so will help you assess your ability to repay the loan and avoid falling into a debt trap. You will then check the lenders’ fees, interest rates, and any additional charges.
Don’t Borrow Cash Advance For Unnecessary Purchases
In the age of rampant spending, you might be tempted to borrow and make unnecessary purchases. Avoid such a mistake since it’s financially dangerous and emotionally detrimental. Ensure that you borrow cash advance for necessary spending.
Don’t Use Cash Advance Loans To Pay Bills
Using cash advances to pay bills like a credit card is a surefire way of falling into a debt trap. You might end up paying higher than you should due to high-interest rates or other charges the loan will accrue.
Insist On Transparency
Lastly, it will help if you ask the lender relevant questions, like the terms and conditions when borrowing advance cash. Failure to do so will leave you struggling with repayment due to unfavorable terms a lender didn’t disclose. In addition, ask if the lender adheres to fair debt collection practices. Doing so will protect you should you default or repay the loan late.
Frequently Asked Questions
How can I find cash advance places near me?
You can find a storefront cash advance place near you by searching online. Additionally, you can also use referrals to find such lenders. However, it would be best to run a background check before engaging the payday lender.
How long will it take to receive a cash advance loan in my bank account from payday lenders?
In most cases, you will receive the loan instantly if you apply in person. An online application can take one business day before the funds hit your savings or checking account. It’d be best to contact the lender to ascertain the time it will take.
What is the repayment period of a cash advance?
You are supposed to repay a cash advance as soon as your next paycheck arrives. Unlike same-day loans, a cash advance is short-term and only serves small emergencies. Failure to pay the instant you receive your paycheck puts you at risk of defaulting.
Can a cash advance affect my credit score?
Cash advances such as credit cash advances won’t affect your credit score directly. However, it will affect your credit utilization ratio and outstanding balance, which determine credit scores.
Wrapping Up On Cash Advance Loans
You might find yourself in tough financial situations due to one reason or the other. It gets worse if you have a poor credit record. Cash advances such as payday loans offer the fastest solution loans in minutes. However, you must be careful when applying for such loans because they have high APR rates, and you might fall into a debt trap if you don’t pay in time.
Therefore, it’d be best if you use the information in this article and apply for a cash advance now. Still not sure? Get in touch with Money-Wise today!