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When faced with a financial emergency, a cash advance loan may appear to be a quick fix – but this type of loan might trap you in debt.
Cash advance loans are short-term loans intended for customers who require money right away. They’re also known as payday loans, guaranteed loans, or no-credit-check loans, and there are plenty of them available online and in stores.
Cash advance loans, on the other hand, usually come with significant costs and the risk of becoming locked in a debt cycle.
What Is an Instant Cash Advance, and How Does It Work?
A payday loan, sometimes known as Instant Cash Advance, is a short-term loan that often promises a rapid application procedure in exchange for immediate cash if granted.
This is how they usually work: You’ll complete a paper or online application, and if approved, the lender will offer you the loan amount (minus certain fees). To obtain the funds, you may be required to submit a check to the lender for the amount you wish to borrow plus the charge. The lender will either debit your bank account for the amount you borrowed plus any additional costs, if you’ve allowed it, or cash the check, if you’ve written one, on your next payday.
Lenders usually want verification of an active bank account or prepaid debit card account, as well as proof of income and age (you must be at least 18 to borrow). The maximum loan amount authorized by state law varies, and it can vary by lender, but it’s normal to see a maximum loan sum of $500, while some lenders go higher and lower.
Suggested Read: First Progress Credit Card Reviews: Is This a Good Option?
Pros and Cons of Instant Cash Advance
Pros
- The fact that you may acquire cash quickly when you need it is perhaps the most crucial benefit of all payday advance scenarios.
- Another advantage is that a cash advance does not use credit as a main criterion for approval.
- Finally, when applying for cash advances, you won’t have to fill out a lot of paperwork.
- Use of the internet portal and receiving a loan offer from a lender are both free of charge
Cons
- One disadvantage to consider is interest and fees.
- Loan amount is limited – Cash Advance allows you to borrow up to $1,000. You may need to hunt for a different loan provider if you need to finance a larger buy.
- Another disadvantage is that these are very short-term loans.
Cash Advances Categories
Payday Loan Cash Advances:
A payday loan works in the same way that its name implies. These loans often demand additional fees in addition to high interest rates, so know the facts before you borrow. When your allocated payday arrives, the money are automatically taken from your account (including interest and fees).
Credit Card Cash Advances:
Credit card cash advances allow you to withdraw cash from an ATM using your credit card. For these transactions, most credit card companies charge higher interest rates than usual, and they may be excluded from any discounts or programmers your credit card company offers.
Merchant Cash Advances:
Merchant cash advances are only for firms that require immediate funds yet have poor credit. It provides firms with quick access to cash and has less severe credit and time criteria than most traditional lending options.
How Do I Apply for a Cash Advance Loan Online?
1. Instantly select the most appropriate cash advance loan option.
2. Double-check that you are eligible to apply.
3. Determine the credit’s amount and term.
4. Use a secure internet browser to fill out the application form.
5. Double-check your information and submit your application.
6. After your online cash advance request has been processed for 24 hours, you will receive an answer.
7. If the lending decision is favorable, the funds will be deposited into your account the same day.
The Following Are the Main Conditions for Applying for Instant Cash Advance
To be eligible for a loan and have money placed into your bank account fast, you must meet the following criteria.
- Be at least 18 years old (19 and 21 for some states)
- Now is not the time to join the military.
- Have a consistent source of income that can be verified
- Maintain a personal bank account.
Instant Cash Advance Alternatives
If you’re suffering financial problems and don’t know where to turn when you need money fast, a cash advance loan may seem like your only alternative.
However, there are other options that may be more suitable for you. Here are a few examples.
Payday Alternative Loans:
These small-dollar loans are available at several federal credit unions and come with a number of consumer protections. Application fees are set at $20, the loan cannot be rolled over into a new loan, and the maturities span from one to twelve months, according to National Credit Union Administration guidelines.
Credit Card Cash Advances:
A credit card cash advance allows you to borrow money against the line of credit on your credit card. Although they’re more expensive than a cash advance loan (you’ll normally pay a fee and a higher interest rate than on credit card purchases), they’re still less expensive than a cash advance loan if repaid on time.
Credit Counselling:
Find a nonprofit credit counsellor who can explain your alternatives and assist you in developing a long-term financial solution to any debt or cash-flow problems you may have.
Is It True That Instant Cash Advance Loans Are Unsecured?
Because these loans are unsecured, the interest rate and annual percentage rate (APR) are frequently extremely high. Depending on the lender, the loans range from $100 to $1000 or more.
Every tenth of a percent is frequently charged in interest. If you have to pay the principal, interest, and all associated costs out of your income, you’ll be left with little to live on, and you’ll have to borrow money again to make ends meet. Instead of being subjected to a slew of hidden fees, you could be better off using a credit card.
As a result, this is not a viable answer to your financial difficulties.
Conclusion
Cash advance loans are essentially payday loans disguised as a handy way to receive cash — but they come with high fees that can lock borrowers in a difficult-to-get-out debt cycle.
Cash advances and payday loans are high-interest, high-cost loans that should only be used as a last resort after you’ve exhausted all other options. However, if you decide that a cash advance loan is what you require, make sure that you factor the amount you’ll owe into your budget for the following payday to avoid falling into the cash-advance trap.
If you’re looking for more possibilities, check LoanMart, which offers a general lending option.
FAQs
Q) Can I receive a quick cash loan even if I have bad credit?
You still have a chance to get money on your account thanks to an alternative risk-counting system.
Q) What happens if I can’t pay back a loan by the due date?
You can always request a credit rollover until you are able to reimburse. However, you won’t be able to get a new one until the previous one is paid off.
Q) Are online cash advances safe?
To safeguard your personal information, be sure the online lender you choose is reputable and secure.
Q) How can I get an instant cash advance?
1. Visit our website and fill out the form.
2. Complete the form
3. It will take 5-60 minutes to process your application.
4. Money will be available for up to 24 hours on the same day.